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Linn Energy, LLC Message Board

  • jim_hairball jim_hairball Jul 11, 2013 4:03 PM Flag

    Crazy Shorts


    The shorts have become emotionally attached to LINE. Why is LNCO trading for over 10% more? LNCO is exactly the same as LINE except for investors receive a 1099 instead of a K-1.
    Nevertheless LNCO would be a better investment if the shorts really believed in their thesis about how LINE is wrong about their hedge bookkeeping. First of all as of now LNCO is 14% higher is price. That should be easy money for a short investor who really did believe. Then LNCO has significantly less shares available and hence easier to manipulate. It is hard to believe those shorting LINE can be that stupid and leave so much money on the table and not short LNCO down to the price on LINE.
    The best answer I can guess is that the shorts have gotten all emotional about this. Their buddy at Barrons cannot stop bragging about his hockey playing friend from Princeton.
    I have added to my cash by selling DVN and will just add to my position in LINE at every drop in price. I like dividends.

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    • I would think LINE would actually trade modestly higher because of the tax advantaged distribution. But, here is a conspiracy theory for you. Perhaps those wanting to get the BRY deal done know they can manipulate LNCO higher due to its trading volume and, if successful, may just change the deal to give everyone LNCO shares in the BRY deal. If so, LINE would catch up shortly thereafter it would seem.

      • 1 Reply to bbandassoc
      • robin0635 Jul 11, 2013 6:13 PM Flag

        This discussion has been had previously - LNCO is far more difficult to short than LINE - Of greater import is that LNCO is primarliy institutional holders, while LINE is more of the mom and pop variety of holders, who are easily scared from their shares - (as last weeks numbers will attest) - compare the daily trade volume and you will see substantial differentiation... From an historical context, a minimum $3/p/s (approx) variant has been maintained throughout the wild fluctuations of each lately... If you prefer the higher dividend rate and can tolerate the extreme swings in valuations, then LINE may be your better alterative; myself I hold LNCO and trade on the volativity of LINE; depending on how each succeeding bear attack is manipulated - (his last round brougt LINE to the 20's and then recovered to the 26's (great if you bought low and then sold).

        Sentiment: Hold

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