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Linn Energy, LLC (LINE) Message Board

ruby.thedyke 111 posts  |  Last Activity: Feb 18, 2014 12:55 AM Member since: May 27, 2010
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  • Reply to

    How do you spelll PONZI ?

    by talkshow55 Feb 5, 2014 3:59 PM
    ruby.thedyke ruby.thedyke Feb 5, 2014 6:37 PM Flag

    A "normal" return on preferred stock is hardly the kind of returns promised in Ponzi schemes . . . but you knew that.

  • Reply to

    Earnings (using the term loosely)

    by obboi Feb 2, 2014 4:57 PM
    ruby.thedyke ruby.thedyke Feb 5, 2014 4:34 PM Flag

    Well, no, it can't, by definition. That is, the remaining company has reserves that support the financing, otherwise the credits wouldn't be granted. They can get into a situation where they have to cut the distribution (again) to meet covenants, especially after what will apparently be another horrible quarter, but they can't go out of business altogether.

    The big question is, will there be a trading opportunity coming up? How will the market react to a bad coverage miss on the lower distribution, or on shaky guidance concerning future distributions? Will the unit price crater into the $4's, or will there be a sense of relief that it wasn't worse? I could see the unit price going 50-75 cents either way! I see no way to take a position now, it's just a dice roll, but if there's carnage, there could be a chance to buy for a dead cat bounce (or a wounded cat I guess, given my argument).

  • Reply to

    Quiet period?

    by lesspheus Feb 3, 2014 2:04 PM
    ruby.thedyke ruby.thedyke Feb 5, 2014 4:28 PM Flag

    Yeah, the accounting office is tearing out their hair, I'm sure. LINE's done a lot of acquisitions, but a big complicated merger is a lot different than folding in a couple hundred wells.

    I'll be really interested not just in what they say about 2014 guidance and so forth, but how they say it, what lasting impact is there from conforming with the silliness imposed on them by the SEC. I haven't seen any other MLP stop using "DCF" or "adjusted EBITDA", just LINE gets whacked with this nonsense?

  • Reply to

    allow me to introduce myself

    by colonelflashmanvc Feb 4, 2014 7:39 PM
    ruby.thedyke ruby.thedyke Feb 5, 2014 4:24 PM Flag

    It took 20 hours before someone came up with that?

  • Reply to

    special meeting

    by berndrummer Feb 5, 2014 8:02 AM
    ruby.thedyke ruby.thedyke Feb 5, 2014 4:23 PM Flag

    I'm going to say yes to this, it's a routine kind of action, they need incentives to attract and keep good people in the management positions. It's relatively minor, and I don't feel like restricting their range of actions just because I don't like the structure, I bought this with eyes wide open in that regard.

  • Reply to

    What's keeping MILL price down?

    by bobs_your_unkle Feb 5, 2014 12:42 PM
    ruby.thedyke ruby.thedyke Feb 5, 2014 4:15 PM Flag

    They can't retire debt, they're in the very early stages of capitalizing on their properties. Indeed, they need more debt (and capital), to move faster. North Fork doesn't fit this company, even if it was a huge bargain (and I don't know that it was). They need to devote their resources to create new reserves, not buy existing production, what are we, an MLP?

    Anyway, it's done, and they got the financing, but I assume the market reaction reflects disappointment that they didn't get a more normal line of credit with traditional banks, rather than a high interest credit with a speculative lender like Apollo. This is the result they get from hiring a financing whiz? Another unnecessary salary. I think they could have got this deal with a phone call.

  • Reply to

    How do you spelll PONZI ?

    by talkshow55 Feb 5, 2014 3:59 PM
    ruby.thedyke ruby.thedyke Feb 5, 2014 4:09 PM Flag

    Dude, a Ponzi scheme is where you convince people to invest with you on the promise of large cash returns, and make the initial payments from new money raised. With a true Ponzi there is no actual business or trade, it's all fiction, with an accidental Ponzi, like Madoff, the person may start with good intentions but get in too deep to back out, when typically they go all in. The key factor in a Ponzi scheme is that the early investors get those unreal returns, that keeps it going. Miller cannot be a Ponzi, by definition, because . . . we're not getting paid!!

  • Reply to

    Financing announced

    by roquew Feb 5, 2014 7:44 AM
    ruby.thedyke ruby.thedyke Feb 5, 2014 10:47 AM Flag

    I guess that accounts for the relatively muted reaction.

  • ruby.thedyke ruby.thedyke Feb 5, 2014 12:53 AM Flag

    There's no accounting for it. MEMP was also down, and big. There was some news there, but it seemed neutral to me. On the other hand LINE is flat, so is BBEP. Go figure.

  • Reply to

    What's the potential upside for this?

    by montyaal Feb 3, 2014 2:41 PM
    ruby.thedyke ruby.thedyke Feb 5, 2014 12:51 AM Flag

    Well, there's a $10 buyout right, so I suppose that's the ultimate upside.

  • I really don't understand that at all, a change in officers in a small MLP doesn't seem like that big of deal, the old dude is still there. Very strange, given that most of the upstreams held there own in the market downturn.

  • Reply to

    LINE - Linn Energy LLC - Downgraded to a Sell

    by sandra888us Feb 1, 2014 6:48 PM
    ruby.thedyke ruby.thedyke Feb 3, 2014 3:51 PM Flag

    Well, this is an income security, so one wouldn't expect it to trade in tandem with the market, aside from sentiment. BBEP is actually slightly green, though MEMP and VNR suffered. Kinda odd, the disparity, one would think the upstreams would pretty much trade together.

  • Reply to

    Dividend increase

    by saldon63 Jan 30, 2014 5:45 PM
    ruby.thedyke ruby.thedyke Jan 31, 2014 1:31 PM Flag

    Agree, they've been flat for too long, to justify a lower price to yield they need to show that distribution growth is back on track. I think they should have done a "good faith" nickel raise after the Berry deal closed, and I'll be very disappointed if we don't at least get visibility on this front. I expect them to go to $3.05. We'll see.

  • Reply to

    Share dilution?

    by primoman37 Jan 31, 2014 11:37 AM
    ruby.thedyke ruby.thedyke Jan 31, 2014 1:28 PM Flag

    Whattya mean pay off the loan? It will be replaced by new credit, obviously. Companies usually carry debt . . . why am I saying anything more? Lame question.

  • Reply to

    Extended to end of Feb

    by giveupagain Jan 31, 2014 10:19 AM
    ruby.thedyke ruby.thedyke Jan 31, 2014 11:09 AM Flag

    Sounds okay, if they do a deal with Apollo, I don't have a problem with that so long as it covers the acquisition. I think the market would be happier if Apollo was out of the picture and the company had a "normal" line with normal banks, but it's early, and it would be expensive to move Apollo out.

  • Reply to

    OUT for now

    by rlbeard6734 Jan 29, 2014 7:04 PM
    ruby.thedyke ruby.thedyke Jan 30, 2014 12:57 PM Flag

    I expect this to re-price in yield, which will provide a shot of capital appreciation over the next couple of years, but that's not why I got back in last year, I hold for cash flow, and the current structure of the company makes me believe my distributions are safe, for the next few years at least.

    I am trying to take my March calls off the table, assuming I can attract a reasonable bid, very thinly traded. I'm concerned the recent run-up will motivate management to pull the trigger again, not leaving enough time for the unit price to recover after the offering dip. And, I have an equal investment in longer dated calls, so it seems wise to take profits on this tranche.

    Only about a 175-200% gain, depending on the breaks. Why oh why didn't I buy more? During those crashes when you have complete conviction that dollars are on sale for a quarter, you just don't tend to go all in, the prevailing mood affects the rational mind. I should have mortgaged my house to buy LINE calls when it was in the low $20's.

  • ruby.thedyke ruby.thedyke Jan 30, 2014 12:40 PM Flag

    Or they just had dinner reservations at Oxheart.

  • Reply to

    OUT for now

    by rlbeard6734 Jan 29, 2014 7:04 PM
    ruby.thedyke ruby.thedyke Jan 30, 2014 12:09 AM Flag

    I think you're incorrect, this is still priced too low in terns of yield, and there's a floor on oil prices due to the costs involved in shale drilling and production. Besides, this company is well hedged and can live through just about any depression in prices for the next several years, as you say. But, hey, it's your nickel, if you have a better target, do it.

  • ruby.thedyke ruby.thedyke Jan 29, 2014 4:11 PM Flag

    Sure, for awhile. Systematically you would expect LNCO to trade at a slight discount to LINE, due to the extra layer of tax at the corporate level. Granted, if LINE isn't spinning out taxable income then that doesn't matter, but there will be a tax bill some time. Probably a very minor component of the market valuation over the next couple of years, at least.

  • Reply to

    Market Correction

    by williamlebotschy Jan 29, 2014 3:42 AM
    ruby.thedyke ruby.thedyke Jan 29, 2014 11:08 AM Flag

    Could be, but that doesn't mean MLP's will participate. They are yield instruments, not growth securities. Oh sure, in a huge move they will follow, but if the market melts down gradually these should hold their own. LINE should go up of course, it's still at a depressed value.

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