In the end what matters is not a bunch of pacifists saying Iran can not have the bomb (like the same liberal pacifists who denounce ISIS, but would never wear a uniform, pick up a weapon, OR allow someone else to do it for them). Talk is cheap, and hiding behind ineffective treaties is an easy excuse to turn a blind eye. Until one morning we wake up and see that Iran has joined the club, daring anyone in the world to challenge them. Too late for any sanctions at that point, no?
And this isn't to say that Iran shouldn't have all the bombs they want. Just saying, the liberals are all talk and can't be bothered with doing what's necessary, when it's necessary, if it involves using any kind of force.
The chart is pointing down, not up, no? No reason it won't test the low of 4.55 as I said. I ALSO said that it won't stay there long.
Back to the initial poster's simple question: Who is buying BBEP?
Never assume there be a buyer for every seller. Trading 101. Market Makers are often on the other side of the trade. They MUST buy a good portion of the shares being sold. But they will "accumulate/Buy" your shares at a lower price than you intend to sell. Takes them one or two seconds to lower the bid pricing, by first lowering the sale price of a few shares they are willing to forfeit in the trade.
The recovery period will my 1-2 years for BBEP, regardless of oil movement. BBEP is low on the totem pole, behind better players. Too easy to short BBEP. That's why oil up 5% today, BBEP flat.
8% distribution will be suspended IF the shorts continue to overwhelm management. Nothing to do with oil prices, has to do with market cap. The only hope for BBEP is for the shorts to cover, which will take 1-2 years IMO. Oil can be $90, shorts can still find reasons to kill management as they have to date.
8% is immaterial to the big players shorting BBEP. Something "else" (besides EIG) has to get them to cover. Nothing else matters.
I'm thinking that the market may not like 8% payout, while waiting for the pps to recover. If the "market" can short BBEP to $4.50 or so, the payout would be more attractive vs. risk, and a bounce-back from that level is almost guaranteed. It's a market-positive day (DOW 260+),,if it were not, BBEP might be down 20%. Testing the low might be healthy for BBEP, because the bounce-back will be quick and they may not have to completely suspend the payout.
Staying long BBEP can work, and you can have a double in one or two years. No guarantees, there could be a merger, or takeover, etc. Sometimes, a stock is just hated by the street, so during that time you have to expect to have heavy shorting, and overselling selling pressure from disgruntled longs. But one should never think they are locking in a great dist. by buying low because that never works for long as distributions historically fall into place via cuts, etc. Does not mean any particular stock can't be on sale for a few days, whereby if it's a high div stock you could lock in an extra percent or so.
I've made a lot of money, being short and long BBEP. It helps when it's a B-level stock, as it is so easy to short WHEN it's paying out more than it can afford and more than what is the norm for the sector. It's not rocket science; a lot of BIG money can be made without day trading, and with very few trades altogether (under 4 in 5 months).
I don't care about the price of oil. I take my position based on current pps and the current payout. Simple as that. When the payout is absurd you short because that's what the professionals are doing. When the pps and payout are aligned proper it's time to be long and take the implied distribution (for MLPs).
LINE is best-of-breed, not so with BBEP
But you are right, LINE is a rare example where the pps gained on the dist. cut announcement. I am betting that won't happen with BBEP unless the pps is below $5 at time of announcement.
Dist. cut is rarely priced in (see the 50% cut two months ago, and the resulting plunge in the pps, but there are thousands of other examples where the pps plunges after div cuts, etc). It doesn't mean that the cut is not healthy and necessary, and that the payouts won't resume in due time, or that BBEP can't survive. I'm simply saying that they will be forced by the banks (and balance sheet/cash flow) to cut or suspend the payout, and the pps will test the low of $4.55. This is why I am once again short BBEP. When I'm not short BBEP I am long.
To think they can continue to payout 16-20% after April is certain folly IMO. Is there anyone who would argue that IF 16-20% were "guaranteed" that the fire sales would have only lasted 20 minutes? We are NOT the only ones following BBEP; we just have the least money among those who matter, and those who would ensure the fire sale ended very soon.
It's pretty simple: If I were wrong, the volume would be 5X what it is today, yesterday, and tomorrow, because there would be a ton of mutual fund managers, brokers, and other deep pockets fighting each other to BUY shares and lock in a 16% distribution from here until the end of time.
Instead, we have the opposite. Only the die-hard longs say I'm wrong, as they can't afford for you to sell your shares and lower the pps even further. Meanwhile, while the call me nuts, they are dumping their shares, hoping to beat the remaining longs to the exit door.
Days of buy and hold passed long ago.
Never assume a distribution that is paying 2X what it normally pays, is safe and won't be changed. Many investors in BBEP learned that lesson two months ago.
It's common knowledge even idiots understand; you cut your payouts, your pps drops because people sell. That does not stop, on a daily basis, MLP and other energy companies from cutting and suspending their payouts.
There are no liberal pacifists governing Saudi Arabia. They will destroy ISIS, and their families, immediately. Executions, military offensives, and beheadings, that will make even Isis blink and think twice.
It's only the west that does not have the guts to do what it takes to kill Isis, not the Saudis.
So let's take a vote. Who thinks BBEP will continue to pay 16-20% distributions because the banks won't care about cash flow? Don't expect that the daft among you, those newbie investors, believe that it normal for ANY MLP to pay 16-20%. Experienced investors understand market manipulation, and short-term sector downtrends, and other issues that temporarily cause a fire sale due to elevated div/distribution,,,,,,this is not one them....the longer the pps stays down here, and tests the bottom of 4.55, the longer BBEP does NOT fit the bill, and simply won't be able to pay out unrealistic distributions.
Not a matter of long term survival, or quality of BBEP, or long-term oil pricing,,,,we're just talking about short and medium term distributions, and the effect further reductions will have on the pps. A double bottom at 4.55 can easily happen.
I disagree, now IS the time to short, just ahead of a distribution cut (or suspension). It should be painfully obvious the market is expecting another cut.
Makes all the sense in the world to downgrade, when UBS knows the banks will not "allow" BBEP to continue to pay 16-20% distributions.
How is that different from the mayor of city filing for bankruptcy, declaring that he or she intends to lower the local income tax to zero? Would that fly?
The banks will determine BBEP's fate in April. Paying out a dividend twice what it historically should be won't pass muster IMO. They will force a 50-100% cut, or deny BBEP extended terms.
At the end of the day, we know, the lenders don't care about cash flow and balance sheets. NOT!!!
The naked shorts have 100 times more cash than you or I, and they are betting that the banks will politely ask BBEP to suspend their dividends, or else face reduce credit from them.