In two years with reduction in base debt and increase in sales from the merger I would be hard pressed to want to sell my shares at only $25 to Verizon. Show me many other companies with a solid and consistent return of 8% coupled with the fact that those of us long-term holders who have averaged out our shares with a 10-11% return and a 50-55% premium is very low, especially, as pointed out earlier we could have sold at $28. Any buyout price that is not north of $30 a share is a steal for the acquirer and a lose for the shareholder.
Of all the reasons for the market to go down after this great unemployment news a .25-.50 percent rate hike has got to be one of the dumbest reasons. Especially ridiculous is the report for CVRR. Why? Because more people employed, lower gas prices equal less inventory. Talk about throwing the "baby out with the bathwater" this market is so irrational.
This scenario reminds me of that great old television program, "WKRP in Cincinnati" It was the episode where, after all of the staff's hard work, Mr. Carlson's mother, who owned the station decided to change the format from rock and roll to "talk". Dr. Johnny Fever confronted her and her classic line was then uttered, "Sometimes you have to lose money to make money". So, fellow shareholders of LNCO I hope that any of your loses can be used to par down any taxes on any of you other stock gains. I know that will be the way I go when that fatal and fateful day comes.
If there is possible stock manipulation going on why does not someone open an SEC complaint? Methinks we doth protest too much!
Here is a reverse scenario: October comes and the management has a change of heart saying that the bond buybacks and stabilizing oil prices (remember this is October) have made them reconsider the earlier call to suspend the dividends. They now recommend continuing the dividend payments at the current level. Thoughts? Possible? Whistling past the graveyard?
According to the 10K the company has 100 percent hedging of natural gas for FY 2015-2017 at rates between $4.48-$5.12 and what is left of 2015 hedging of oil at 90 percent hedged averaged at $88 a barrel. 2016 is hedged in oil at 70 percent based on $90, yes NINETY DOLLARS a barrel. What the H#LL am I missing? Yes I know the debt but when compared to others in the field aren't they better hedged than many? Please enlighten me.
Current guidance for the full-year 2015 anticipates funding total oil and natural gas capital expenditures, along with distributions paid through September 2015, from internally generated cash flow with an excess of net cash after total oil and natural gas development costs of approximately $200 million; HOW?
"There have been declines in the quoted market price of LINN Energy units subsequent to June 30, 2015, and if the Company were to determine that such loss in value has indicated an impairment that is other than temporary, accounting rules may require the Company to write down, as a noncash charge to earnings, the carrying value of its investment in LINN Energy. Any impairment could be substantial and have a material adverse effect on the Company's results of operations in the period incurred. "
But marco wouldn't that technically be insider stock manipulation, the way you are laying it out? How is it "totally legal"?
What is to keep management from determining that the two dividends still in the pipeline are not to be suspended too? There is no reason that they HAVE to wait until suspension is to take place next quarter. Can't they decide in the interim that these two monthly distributions have to be suspended too?
So you would say management would do a reverse split first and then LBO based on the reduced shares?
All I have to say in reply to the hedging is that they better damn well use any of the monies to pay off the debt. If you will recall management also told us the "hedging" fiction that our dividend distribution should be good throughout the rest of the FY based on the aforementioned hedges. I think that is the main reason many of us are skeptical and the stock keeps going down... management's inability to let us assimilate all of the bad news in one sitting. It is like pulling off a band-aid. Most of us would rather pull it off all at once instead of a slow, excrutiating pull. If they had just cut distribution right away like some of us thought, if they had just begun to pay down debt and told us up front; if they had just been forthright about issuing more stock; IF,IF,IF. Now instead of coming back on some positive news in this quarter everyone is focusing on the dividend cut. We could have absorbed all this pain so much better and earlier if management had just had the backbone at the beginning of the year.
Well somebody as "shorted" it to just about its limit. Great that they are paying down debt. Would have been nice if they had let that be known when they did it. I am very worried that I cannot trust what management says anymore. However, I am in too deep now and have to assume that we are finally doing something about the debt which is the number one concern for all potential investors. I am hopeful that what we lose in dividends we may see in a slow rebound of the stock price; but with this management I am not holding my breath..... my nose, YES, but not my breath!
Hey tulsa don't forget to give equal billing to RBC and Raymond James with Raymond James analysts' giving the companies both "Outperform" rating with Buys. Come on now let's be fair.