Hey Cheerleaders... tell me that EPD mgmt isnt manipulating the news cycle
But they're still diluting the stock and the price is probably going to drop a couple bucks today. That means somebody is going to get kicked in the pants. The original poster is not all wrong. You're flipping it off as if it means nothing. Well maybe so and maybe not. This has got to be hurting a whole lot of investors IMO.
The basic premise of dilution from a secondary is incorrect. If a MLP can get a greater return from the assets they purchase from the $$ received from the secondary then the secondary is accretive. The problem with secondaries is that there are too many people who can learn about then nan hour or two ahead of the rest. It is not specific to any company. The info does leak and that is too bad.
The bottom line question here is did EPD do exactly what it said it would do with its distribution by increasing it faster beginning with q3 of this year - YES. Agree the market timing of the secondary unfortunate but they have been a buying opportunity about 97% of the time.
Stock issuances are only dilutive if they do not lead to at least a corresponding increase in dcf sufficient to cover distributions on marginal shares issued. That has NEVER been the case with EPD. EPD's founding family has reinvested millions of dollars in additional stock over the years which has resulted in far fewer secondaries over the past two years.
EPD management's reported previously they had no plans to issue equity in 2012. Makes me wonder if they have an $800M deal in the works soon to be announced. EPD has been highly successful at integrating acquisitions meaning they quickly lower the acquisition ebitda multiple significantly with the first and second integration projects in said system(s) purchased.
relax, so the price drops two bucks today, if that bothers you that much, you should not be invested in the market. The distribution is safe and is now confirmed to be rising. If you didn't know a secondary was a possibility, you didn't due your due diligence when investing. You don't get hurt unless you decide to cash out when it drops. It will be the same price by the ex-date of the next dividend, if not higher from yesterday. Deep breaths people.