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Crosstex Energy, Komandit Şirket Message Board

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  • cubicle_99 cubicle_99 Jan 7, 2010 10:31 PM Flag

    Some thoughts on the preferred issue

    XTEX is already over $10.- without the distribution...so you'd better go back to the drawing board and add a multiplier.

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    • Are you saying that this stock would support a price of $10 indefinitely without a dividend? I doubt that you are. I don't think it would support a price of $1 without at least the expectation of a dividend. It has run up on the expectation that the dividend will return. No one knows what that dividend will be, but the significant runup in the past week or so indicates that the expectations are for a $.25 quarterly distribution, or at least a gradual return to that figure.

      This stock has sold off assets and the price of NG is about $6 per mmBTU, so I'm not sure what the normalized earning power of the stock is.

      I'm just happy the stock has run up, but it's getting a little bit frothy here.

      • 2 Replies to smorefi60
      • I am not currently concerned with the preferred offering diluting our equity because the pfd has yet to be converted to common. The press release by the company said they pfd stock would be converted to common only if certain conditions are met, conditions which I have no idea of what they include. For the time being the preferred offering to me is the same as issuing bonds at 10%. Why worry now about dilution until the preferred stock is actually issued as common units.

      • I don't believe the current IDR agreement will survive this transaction and the refinancing, though I don't have an idea how it will shake out. Given management's ownership of XTXI, I expect XTXI will fare well if a refinance can be secured. And I think Blackstone's presence pretty much guarantees that. Any thoughts?