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Linn Energy, LLC Message Board

  • opinionsarelike33 opinionsarelike33 Oct 31, 2013 1:09 PM Flag

    Here is why the SEC is investiating

    LINN not because of the BRY deal.

    It hasn’t been a good couple of months for investors in LINN Energy, as the stock has taken a beating after reports that it had been overstating its cash flows and that its high dividends may be unsustainable. The stock was down big time on Tuesday after the company disclosed an

    [SEC inquiry into its use of non-GAAP accounting and its hedging strategy,]

    putting into question the final closing of an acquisition of Berry Petroleum and auguring further downside if any foul play is finally detected.

    Oil and natural gas producer LINN Energy has seen its shares fall a dramatic 28.4% since the first days of May, before Barron’s put out an article questioning “aggressive” accounting tactics that masked the underlying financial weakness of the company. Even with the support of Omega’s Leon Cooperman, the stock took a new tumble on Tuesday as it voluntarily disclosed a private SEC investigation. And while LINN’s management suggested their proposed stock-for-stock acquisition of Berry Petroleum is on track, investors are beginning to express their doubts.

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    • We all are pretty well versed on the SEC "informal inquiry". It was never an "investigation", and as so often is the case with the SEC, someone, somewhere, is working on this and will eventually close the books on it. Compare this inquiry to the investigations of Madoff and Stanford and many others. The SEC has a job to do, but sometimes the focus is on ghosts and not reality-driven facts. The informal inquiry was the direct result of complaints, not from happy LINE shareholders, but from funds, magazines, and individuals who stood to benefit from negative publicity about the company. They couldn't do it with the 11% return. The couldn't do it with the company's expansion to continue that return. They couldn't do it with the company's hedging practices that were brilliant. They couldn't do it with the company's years-long proven track record and impeccible management. They had to do it with ghosts. Ghosts of accounting practices that have turned up absolutely nothing short of re-wording some things and moving figures from column A to column B. That, my friends, is a fact. Anyone here who honestly believes that there are still shoes to drop from the SEC informal inquiry simply does not understand how the SEC or a company's accounting department works. Had the SEC turned up anything substantial, previous quarters would have been revised and LINE management would have made those changes immediately. So, we are not waiting on the SEC to close its informal inquiry, we are simply waiting on someone, somewhere, at the SEC, to read that last S4, include the 3rd Q in its numbers, and sign off. BRY knows that, and may or may not still want the deal. LINE knows that and may or may not still want the deal. I believe that and I am still not sure if I want the deal or not. But, either way, LINE will be fine and probably sooner rather than later.....

    • LINE went down because they had a very bad 1st qtr and then followed it up by an even worse 2nd qtr. If you follow any company you will see that when they do not perform or meet expectations the stock price goes down. I know you will try and show me an example of PPS going up when a company had bad numbers but it will be an oddity.

    • actually your summary of timing is wrong. The first article in Barrons and hedge eye attack came out before the first big drop in linn energy.

      so stop making up stories to suit your purpose.

    • They could very well be using the s4 wording to get the satisfaction but as we have seen no big dramatic revelations

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