No thumbs down, but I disagree. The #$%$ storm created is much worse than no dividend increase/reduced dividend outlook. The uncertainty factor, bad accounting/oversight/internal controls whatever you want to call it is not good. If financials aren't available on the day they announced, this will tank again.
Kuwait says 65 dollar oil is likely for 6 months or so. Perhaps that is how long it will take the rest of OPEC to stop overproducing. IMO Saudi won't cut production until the OPEC over producers cut production. Getting OPEC to act in unison is just as important for Saudi as disrupting CAPEX/future production from non opec countries. This is needed to allow time for global oil demand to catch up to global oil production. In the mean time, I try to figure out just how many shares of LNCO I should buy.
From a news article.
The Organization of Petroleum Exporting Countries pumped 30.56 million barrels a day in November, exceeding its target of 30 million for a sixth consecutive month, according to estimates compiled by Bloomberg. U.S. oil production accelerated to 9.08 million barrels a day through Nov. 28, according to data from the Energy Information Administration. That's the fastest rate in weekly records that started in January 1983.
buying back shares reduces future cash requirements for dividends. It would lead to a more stable dividend. Doing it now would probably result in a rally as the known is better than the unknown. Right now some think they're gonna cut 50%. The company ought to retire some of these cheap shares which will reward shareholders down the road. Otherwise share price will lag because people will question an unsustainable (maybe just in their mind) dividend policy.
I don't see that happening. I'd prefer they reallocate return to shareholders into share buybacks and reduce the dividend as needed. What is going on has little to do with winter slowdown in demand. The world economies pretty much suc. Demand growth is down. The good news if any is that no one thinks this will last much into 2016. First half of 2015 could get uglier. Next OPEC meeting not for 6 months. If OPEC production not down to 30 million bpd by then, a cut( of their production celing) at that time will be very unlikely.
hopefully they are buying some shares. I think they had to wait to announce until after OPEC. My hope is that they have been busy hedging more production. Dividend announcement is due now anyway, so perhaps guidance going forward will be provided as well. I'm just gonna reinvest dividend and maybe add if this bottoms.
couldn't agree more. demand will rise no doubt. just as important capex spending is declining across the industry and new projects/production are being put on hold. OPEC will be forced to cut production back to their mandate quota of 30 million barrels per day if they want any production cuts out of Saudi. . Perhaps this will happen prior to their next scheduled meeting 6 months from now. IMO roller coaster ride for oil for next several years, unless demand strengthens significantly. Amazing timing of deals in retrospect by LINE/LNCO.
I suspect that if they do it will be much smaller. They went to a managed payout of 9 cents a month vs paying an earned dividend. Last month pay out included return of capital. Suspect they will likely bump the monthly payout again next year.
Sears is not likely selling all locations. They already have a subsidiary real estate managment firm that is managing many of the old sears location redevelopment. That firm will likely have an IPO.
indeed. but the bottom line remains the same. Immaterial error/fraud. Management reaction to Cole termination is troublesome to me. Whining almost. The problem with ARCP is that it didn't have much "goodwill" with shareholders. The frenzied acquisitions, underwater share offering,cozy cole deal, and lobster mania left many shareholders on the edge. All it took was someone to yell "fire" to empty the theater.
Funny, last week undoing the Cole Deal was a must. Now that it is undone, its now horrible news.... Now they can sell it out right and cut ties 100%.
also tells me that the potential damage payable to shareholders per share will be small. I think lawyers will argue that the price paid was too high considering the real FFO/AFFO numbers. So, the damage will be the difference between what was paid for share and what the revised share valuation would have been based on the correct numbers. On the company side, the share price was selling at a discount to peers anyway so the argument will be weak at best.
also aren't they fishing for shareholders who had 100k in losses? Seems to me that the number of plaintiffs will be limited.
not even close. Enron execs lied to the BOD and hid billions of dollars of debt. We're talking about a 3 cent a share or 29 million dollar fraudulent number.
The main sticking point will be whether or not the error was "material". It can be spun either way, I don't have a crystal ball, but my opinion is that potential liability/"damage" will be muted by the small size and relative lack of impact on the company's financials. Blame will fall where it should. Just don't think the damage will be material either.
They didn't sell because of the intentional fraud, they sold because of panic. If the management statement regarding the issues is a lie or contains material errors then the company has problems. Management self reported the issue, it did not arise from a formal SEC investigation. Big difference.
credit watch is what you should have expected it is not positive. Negative will be a credit downgrade. When SP confirms credit rating that will be a significant positive.