My guess is someone helping shorts who also has top SEC connections filed a complaint to push this SEC inquiry. You have Barrons, Bloomberg news, and SEC now all pawns helping shorts to take down LINE, LNCO, and BRY. Worst case might be changing the wording of disclosures. We also have a new SEC head out to prove she is tough
Here's the deal Questions have been asked about their sustainable distributable cash flows. I would have to agree that based on their last two quarters it seems questionable shorts seem to imply that there is no distributable income that doesn' come from increasing borrowing. They are nuts! Line actually has a business model that makes sense. Let's say that they know they can make $10.00 a barrel on anythihg priced over $$88.00 barrel. They lock in that price through hedging. Oil goes to $95.00 a barrel, they lose their hedge premium but still make their $10.00 barrel. My guess is that they are simply trying to stabilize income in a world of instability. So fund managers don't get the idea that if you capitalize the premium and amortize it over the life of the hedge it is Ponzi scheme. To me it sounds like a great business model, even if it limits your iincome on the upside it provides you with a known income regardless of the current price of oil. I am too scared to buy anmore of LINE but will not sell the couple of thousand shares I own.
BRY deal must be done. BRY is actually up today while LINE twins are down huge. The big loss at LINE is also a sign the deal will not go through which would hurt their payout rates already announced. Some huge funds must be trading on insider information.