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Linn Energy, LLC (LINE) Message Board

  • rrb1981 rrb1981 Aug 12, 2014 10:07 PM Flag

    LINE/LNCO Spread

    Less than $1/unit spread.

    Finally getting a little convergence and will be quite interesting to see if we get divergence again (with LNCO rising above LINE). Not sure if this is them getting some positive goodwill compression of the spread thanks to Kinder or or if it is the buyback/offering or some combination.

    As was pointed out, the announcement of the buy-back as well as shelf offering..allows Linn to simultaneously buy LNCO on the open market and sell LINE, pocketing a modest spread. I think the mere mention of the potential is enough to tighten the spread without the need for them to actually put it into action.

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    • I've been watching the compression carefully and posted many times that I expected LNCO to go back to its previous premium. Your thought that Linn might be in the market helping the process along is an interesting one. It certainly makes sense. I recall at an earlier cc that management had no good explanation for the large spread except that it might be taking longer than anticipated to move the old BRY shareholders into new hands. Linn knows who holds it's stock and may believe now is the time to move the price of LNCO up so it becomes a more attractive currency for acquisitions - and make a nice profit in the process. GLTA

      Sentiment: Buy

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