1st off if you read the transcript you will see the CEO said they needed some equity but not as much as a few months ago.
2nd the Sun refinery deal with the Carlyle Group and the upgrade on Sunoco is a + for ETP not a neg. this was way oversold today
In the short term the Carlyle Group deal has created uncertainty as to whether with a new source of oil and a new operator it will be more successful than under SUN when it lost money. It also put a crimp on cash as the closing was going to free up $500M that was going to belong to ETP thus reducing the need for cash. I agree the deal will work with a $20/bbl reduction in oil cost, but it creates the above issues which simply add to the myriad of other things that are changing at ETP.
ETP is a dead money stock that will languish for years. Its cost of capital is almost double EPD and MMP. EPD and MMP have years of organic growth initiatives while ETP has no alternative but to acquire growth at ebitda multiples too high for unitholders to prosper. Analysis shows that ETP dcf growth consumed by new share issuances meaning no dcf growth for higher distributions. ETE is the only winner in that scenerio. If you go back to 2009 OKS and ETP both sold at $50 except OKS has doubled and did a two for one split while ETP languishes.
ETP management failed. It tied up too much capital for too long in retail propane. Management made the mistake of hanging on to a dead money business while the peer group kept moving forward on powerfully accretive organic initiatives.
Even Cramer finally caved and recognized that ETP has no real future growth ahead and if interest rates start rising there is a distinct possibility that distributions would have to be reduced.
Any of you that held ETP for yield the last four years have missed incredible capital gains and meaningful distribution growth from many other MLPs. Its well past time to move on.
Interesting comment on OKS as OKS was dead money from 2003 to 2009. Need to look at the overall picture unless you are running for political office. Then anything goes. Not just the dates that tell the story you want.
Cramer is dissapointed cause of the last secondary, I am as well.
BUT its too early to know how well all of the new assets will be digested. Since I am getting paid over 8% I can afford to wait even though it may take a couple of quarters to play out and wait for the fat lady to sing.
did you notice that Cramer is holding and not selling?