Somebody or something is attacking BPT. We have seen nothing that justifies this kind of drop. If the Trustee(s) of BPT royalty trust had information effecting this stock they have a duty to inform shareholders. I have seen nothing like that. Therefore, I smell a big fat rat. I hope the SEC/Feds do an investigation into this. Otherwise, we could see this happen with any stock on the market or many at the same time.
In all honesty, your time would be better served investigating the public BPT filings and then building a model. That model will show you that BPT is overvalued even at today's closing price of $76.77.
It's funny to me when people act as though the Seeking Alpha pieces and the WSJ piece are written by "hit men" who just want to drive down the stock. If that was the case, how come no one has been able to rebut the analysis by writing an article that supported the crazy valuations above $120?
What the Seeking Alpha articles and the WSJ article did was warn you and every other unitholder out there that, sooner or later, you were going to be left holding the bag if you stayed long. Today's move may not be the end; based on my calculations, it is still substantially overvalued at today's closing price. Buyers (and holders who refused to sell when articles warned you about the inflated price of this trust when it traded well above $110 and continue to refuse to sell today) beware.
I agree that it should be investigated as the wsj and seeking alpha articles are little more then hit pieces and there are likely to be some big players taking advantage using options and then feeding the "news articles". My internal target for PV is $112, but I assume a oil price that raises with inflation and a 8% discount rate... the mistake all the articles are making is that the distributions fluctuate with oil price and will vary widely based on your discount rate assumptions.
Honestly, they may very well scare enough longs out to get the price to $60 whatever their target is. There is a lot of retail in this stock and a lot of retail trades on wsj, barrons, and the other trash. That mid $60 target is based on a flat oil price and a 10% discount rate so I will be a heavy buyer there. I bought in originally in 1999 back when everyone freaked out because BPT missed a distribution (should have been there for that one, idiots said it was a zero then). Pay no attention to the shills and "news" articles, I've always made more money betting against the advice in hit pieces which this is in my view.
The best part is they don't even look at the possible upside. What happens if Bernanke screws up and the dollar falls. Cost structure is based on the CPI which the government manipulates so the corresponding oil price rise CPI rise. In 1999 they said BPT was a zero. Now in 2012 they are saying its a zero in 2027, this may create the best entry point since 2000. Go shorts go, lol. BPT will be producing oil and making distributions for many more years. Yes the cost structure jumps in 2020, and eventually it will produce a negative distribution unless Bernanke implements hyperinflation, but I have a feeling this going to be when chargeable costs reach $200 around 2040.
Wake up boys and girls. You chose to own an ultra-high yielding investment that depletes over time. Better to own MLPs where after a few years of decent distribution growth you have a double-digit yield to cost than own any asset that depletes.
It could have something to do with the company itself saying that it is worth $1.4 billion and then having the WSJ point that out in the past week. I doubt all BPT investors even read the annual report or have done their own NPV calculations on future distributions. I've also seen some independent analysis scattered across the web over the past month on BPT that peg its value at $50-70 a share. I'd say it's worth closer to $60-80 so there may be some value if it keeps falling!
SEC loves this kind of volatile destruction of owner value. They got rid of uptick rule in 2007 to create situations like this. Damn the investor is their philosophy as long as the hedge funds can take a timely WSJ (or whoever publishes it) article and attack stocks with few anxious buyers for a time.