" The dividend will be about the same because you get about 2.5X shares. "
not true the %div rate for the new kmi will be lower than the previous KMR shares div rate.
thats a simpleton statement. Its a difference of dealing with different tax treatments. Bottom line is its Ordinary Income versus Qualified dividends/Capital gains. I wasn't talking about the cost of processing a K1.
simple answer is yes, if all goes well you get a few percent on the arbirage. if the deal goes south you will have gained at least one period of KMR PIK divs and its still all in the same family. Icing on the cake is that KMR to KMI has no tax consequences.
I sold all my KMI and put in KMR, I was long both before hand. I am considering shorting kmi and using the funds to buy more KMR.
You forgot to account for the deferred ordinary income he has been receiving since 2002.
I don't know about 100K sounds high BUT your analysis is completely wrong.
linn energy doesn't have a GP, LNCO was just recently created to make linn energy available to more investors
"KMR holders have always been an odd bunch - IRA and pension types but also KYN, the best MLP closed-end fund"
Don't think I'm all that odd. KMR has been my longest and largest holding (until very recently where I had to cash out some of it) It had a higher total ROI and as long as the income was not needed right away no upfront tax consequences.
But your right, I'll probably be selling my KMI tomorrow and putting the cash into KMR.
short kmi / long kmr
I happen to own almost equal amounts of KMI and KMR, so was thinking of selling my kmi and buying kmr. and possibly going short kmi.
what did you expect ? Kinder owns KMI, KMI owns KMP via the internal i shares, KMI owns the IDRs. This is a consolidation of assets NOT a takeover of another company.
bunch of idiots whining over nothing. All they see are the IDRs without the rest of the benefit of the GP. Its clearly to KMIs benefit to grow the distribution of KMP\KMR since its leveraged to the upside.
I currently have my Kinder holding about 50% kmi and 50% kmr so I benefit from BOTH of them.
New england simply doesn't have the pipeline bandwidth to bring in natgas from the rest of the country. They are one of the few (only ?) that relies on importing LNG. Last Ii heard spectra energy was working to increase pipes to the area.
its the growth versus income decision, if your more interested in regular tax deferred income payments right away than long term capital gain growth then etp is more desirable because of its *ahem* distributions.
Until you sell most of the gains for ETE are paper gains.
my energy transfer position is ~50% ete and ~50% etp to take advantage of both aspects.
you could also consider folding your position but stopping the reinvestment of the distributions for a while and putting them into something else. Gives you a chance to diversify a bit