A couple of weeks ago there was an erroneous article in Barons about questionable goings on at LINE. It doesn't seem to make ANY difference whether it was true or not! GUILTY until proven innocent! RIGHT? LETS SHORT THE HELL OUT OF LINN ENERGY AND DRIVE THE POOR SAPS OUT OF THE STOCK. YOU KNOW WHO THEY ARE, RIGHT? THE POOR RETIREES THAT ARE TRYING TO MAKE IT THROUGH LIFE WITHOUT LIVING OFF THE GOVERMENT! WHY WOULD ANYONE WANT TO INVEST IN THIS MARKET AS LONG IT IS TOTALLY STACKED FOR THE RICH AND AGAINST THE LITTLE GUY! LONG TERM SENTIMENT DISCLOSURE-----PUKE!!!!!!!!!
It's not been proven to be erroneous but I do wonder, and forgive me if I'm just a biased long, if there is any possibility that part of the reason the SEC wanted to do the "informal" investigation into LINE was to see if the Barron's article was intended as a means to manipulate the stock price.
ANY potential for this to be the case?
Whose says its erroneous? I am not short , but am a bondholder and for more than a year I've been looking at wildly negative free cash flow earnings reports and saying to myself #$%$. Spending $900 mill of real money on puts instead of zero on swap arrangements seemed bizarre to me, but hey I'm not an expert in this field. I can easily see the bonds are covered and so went back to sleep. But debt has been exploding, they have little to no cash and so we get someone raising a hand asking questions is this sustainable. Not illegal, been happening since the beginning of the exchanges. Reaching for yield can be very very dangerous, but to say this was a way to get the little guy out is your own frustration for being there in the first place. I hope it works out for all.
You do realize that the majority of the puts that linn energy has so far bot are itm and were purchased otm ? And also that now as they are curtailing put purchases the pricing of natgas is in a major bottoming phase with lows in the 2s?
so their hedge strategy worked and your complaining ? That doesn't make sense imo
Here's how I see it. Hedgeye stands to gain huge money from subscribers to its "services" as it creates massive publicity for itself and chalks up so-called success at creating enough seemingly credible scare "analyses, articles, rumors, innuendo, etc., and convincing very big money hedge funds to short a stock, e.g., LINE. The Hedge funds stand to gain HUGE by joining in the orchestrated campaign (conspiracy?) to drive a stock's price down 20-30% of more. Neither Hedgeye or the hedge funds are bound to the same rigorous SEC disclosure rules as LINE and other public corporations and partnerships. Large, smart, and quick-on-the draw investors will bail out of a position at the first hint of only slight the possibility of bad news, especially when it's magnified and amplified by "credible" press like Barron's. ...The don't wait and do an analysis when the Hedge-orchestrated "news" hits. They sell then evaluate the situation. The majority of retail investors are inclined to evaluate first (and for a few days), and then, often, sell when the perceived pain gets too much to bear. So the scare program and massive shorting campaign (conspiracy) works.
Some numbers: At the end of May, over 11 million LINE shares were short...probably at the upper $30s.....$36-37 a share. The price-volume charts indicate these were covered in the low $20s...$22-24. That represents a gain of $12-15 a share...a quick profit of $136 - 165 million. Is there a conflict of interest at Hedgeye and at the Hedge Funds. Absolutely and it's massive in my view. And in all of this, one has never seen a hint of fair and balanced full disclosure from the Hedge Funds and Hedgeye that's required of corporations and partnerships required by the SEC.
The right strategy in all of this for the longs is either stay long or sell quickly and re-buy (even double up) at the bottom is you have the guts, stamina, analytic skills, and self confidence to do so.
No stock is a lose until you sell it & no stock is a gain until you sell it. People make their own decisions & if it is the wrong one, live with it. The best one can do is the do due diligence, so that they can make informed decisions.
Take a deep breath, take a drink, take a toke, whatever but it isn't that big of a deal. The price will come back, the dividends are secure and if you don't panic all will be well. GLL