I agree with the bird in the hand in a general sense. But its unlikely that the conversion will be scrapped or that court challeneges will have any impact. Owners of KMP are "limited partners" NOT voting stockholders, and the only downside for the limited partners is that tax is due on ordinary income that was deferred. The limited partners also had the choice of investing in KMR instead of KMP, for which the conversion is a non tax event.
ha ha your funny, you think richard kinder is going to buy the one and only mlp that could have fit the hedgeye scenario (which as a matter of fact Hedgeeye completely missed).
yes and no. yes there is a lot of natgas in the USA, except for new england. yes we do need more storage infrastructure, yes the bakken flares a lot. BUT the real reason the bakken flares a lot is they went after the oil without building the infrastructure to get the natgas out. stupid gold rush mentality.
now if you know who is the building the pipelines to get the natgas out of the bakken at various stages then you have a winner winner chicken dinner.
If you had actually read the whole article you would know the answer is no.
First off its a different person that wrote the article than Cramer, so there are two mouths.
Second and more to the point the article is talking about managing the event for saftey and maximum gain and NOT exiting the kinder investment. At the end of the article is Adam Scott's suggestion and conclusion.
"If you have already owned KMP for at least a year, consider selling now to lock in recent profits and your long term capital-gain rate. If you don't want to lose exposure to the deal, simply buy KMI with your proceeds. The two are in lock-step at this point and only one will exist a year from now."
Sounds like your only considering selling enough kmi to pay for taxes. I always like to take a bit of profit anytime an investment has made a large gain. Since no matter what you do this event is causing a tax event on your entire position, you might consider redeploying some of it into something else for diversification.
and that is a takeover of capital :)
its a cleaner transaction, and you get opportunity to redeploy the capital someplace else, including KMR if you want to stay in kinder
whats the point of this projection ? Oil will stay relatively high and in high global demand at least for the next couple of decades.
"if someone bought 172 K shares it also means some one sold 172 k "
thats the stupidest comment people in denial generally make.
"The company also could have structured the roll-up transaction as a nontaxable transaction to unit holders, but chose not to."
I don't see how thats possible since your converting from a limited partner\mlp to a c corp. The udo tax burden is strictly based on deferred taxes on ordinary income, which is unavoidable with the ending of the mlp.
Check out the holdings of our congressmand and senators, I'll bet you will find a lot of $$ in the mlps. Do you really think they will ever create new lesgilation eliminating the tax shelter?