I've been called every name in the book for thinking this, but I believe the earnings and any other controllable item is manipulated to keep KMI under $40 thereby avoiding the Warrants to trigger stock issuance ... until Rich Kinder buys back a majority of the Warrants, (which is an important item to listen for on the Conference Call, the Board approving additional buy-back is bullish), KMI will remain an under performer ... eventually the increasing DCF will catch up and the Market will take this $40 ceiling out ... then if you're an El Paso warrant holder, it's payday ...
Interesting theory about the warrants.
But I disagree.
Why would a warrant holder exercise their warrants into KMI? I don't think exercising makes economic sense.
Exercising a warrant today would cost 40.00 whereas I could buy a share of KMI for 38.95.
If a warrant holder sold a warrant today, they'd get 5.38. They could then buy one share of KMI for 40.00 and the net cost would be 34.62 compared to the 40.00 by exercising.
There's no reason I can think of why a warrant holder would exercise now. The warrants offer leverage and they don't expiire for another 4 years. Why would I want to exercise and have to put up significantly more cash to effectively control the same amout of shares?