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Kinder Morgan Management, LLC Message Board

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  • NORCROSS2 NORCROSS2 Aug 7, 2012 3:54 PM Flag

    KMR price should be 1.5% less than KMP

    I wouldn't want to get into the actual share price of KMR on offer in this new stock offering of KMR. However, the point you make reminds me of what happened to Cisco Systems in the 90's. They kept reporting astounding net profit increases and then somebody pointed out that all those CSCO stock options that they were giving to their employees were a real expense to the general shareholders. So the SEC required Cisco and all the other public companies to start subtracting the costs of those distributions of shares and stock options from their earnings(making them GAAP earnings). To this day, CSCO analysts get confused over GAAP earnings and non-GAAP earnings and it sometimes causes huge drops in the share price of CSCO. Not saying this is the same as KMR, but any perception that somebody is getting a better deal on their shares is seen as a cost to the present shareholders. But long term, again I say that all this is really just part of a nice growth story and will grow shareholder value.