76 million shares float at $60 would value REGN about $4.5 billion. That's a small startup. Agreed unlikely to go that low. There's 25% of the stock held by insiders. So there couldn't be a lot of stock available for short selling I wouldn't think. We'll have to see what happens. Volume on Friday (1.5 million) was about double normal. Volume on Monday will reveal a lot. If assume 2017 earnings of $16/share then at $490 would make future PE 30. Very reasonable price I think. Not time to cut and run. Let them do their research and we'll be fine. Best.
Thanks for your clear response. I hope GS and ML are all wrong, too. Jim Cramer constantly takes analysts to task when they recommend a stock after it's had a big run or do like this guy and tell you to get out when I've already lost almost all I had in it. I've read that new oil from most projects in the US costs about $70 barrel. It will be a dicey 2016. The jobs being cut inside energy infrastructure areas will cause a lot of pain to American families too.
One month ago Merrill had a buy rating on BBEP. Now they are saying oil will not get to $61 until 2022 and that BBEP needs $75 to maintain dividend. They predict dividend will have to go away.
Now many opportunities did they have to take a harder look between $22 and $2.50? But I need to suggest to this board that Merrill is right. They then say that BBEP at $2 is an "option" on oil. They question is BBEP can continue to operate as an MLP! This is serious now. They say:
"We would anticipate BBEP to be very proactive on improving the balance sheet and that its strategic partner EIG still has a vested interest in seeing it succeed. Our $2 PO [price objective] is essentially option value because BBEP needs a substantially higher long term oil price to operate." Yikes! #$%$!
Now the only hope (not a good way to invest) is that management has a great plan or that OPEC and other producers reduce production. But basically the good times are gone. And all the posts on this board about dividends and stock price could be a moot point. What I've lost is a lot to me but in the grand scheme just chump change. The world has changed for BBEP. It won't get back to $5 for a long time if ever. Sorry to ruin the party.
All bets are off now. Doesn't matter how good a job DVN or any oil company has done to prepare for future. You couldn't go out and reinvest and replace the value of DVN. The fact that Schlumberger is buying Cameron shows that companies that expect to be in business five years from now (or to infinity as most companies expect) see great value---like finding a perfectly good sofa someone put in the alleyway.
So we will still have to go down some more. No buyers at all for oil stocks. It will end but not soon enough. Too cheap to sell too dear to buy. Can you believe it? Best.
The only good news is that BBEP is worth around $475 Million. What's left to sell? Office furniture? If oil goes to $30 a barrel, how much more can BBEP go down? 173 million shares at $1. We'd be delisted soon to the pink sheets. Also, EIG Global invested $1 Billion back at end of March. Wonder what they're thinking? They get first dibs with preferred stock.
My point is that if you pay off EIG and other preferred, common stockholders are in serious trouble. The market maker could just close up shop and take a vacation because trading the common has so little value. I have not lost as much as many on this board, but it's all relative to what one's total portfolio is.
Yahoo says value is Common shares X $2.26 = $475 million (roughly) but when you take out the other what's it worth? Such a very, very strange situation. I'm asking myself if there is any value left if only selling at $2 and headed to $1. Textbooks warn about being a common shareholder and other claims before ours. And here it is.
TO MANAGEMENT OF BBEP: kill the dividend. What does it prove now?
Good question. We are all dreamers in a nightmare like one of those horror movie trailers on TV. Every time we turn around another terrible event. In case of MEMP, the stock just keeps falling and falling with nothing to stop it. Too cheap to sell to dear to buy so I can only suggest holding. There will be plenty of buying opportunities if oil ever hits bottom. (Oil cheaper than water!) Once it does turn there will be plenty of short sellers still thinking it's a false rally. Hold only what you're comfortable with holding now. So it will be a stair step recovery as well. Like a sawtooth recovery that keeps sawing up your gains!
I keep asking myself if buy more or just take my lumps? MEMP is in denial that the dividend is sustainable. I just received the most recent one. Need to take a screen shot of that one. Maybe see that again in 2025! I don't mean to be just acting stupid but the company has been drastically altered. It's now a matter of cutting cutting cutting--wages, dividends, expenditures to bare bones. This is a depression due to no one's actions except Saudi Arabia, our one-time friend. I've watched my investment in BBEP go to $2. It's a 10-bagger in reverse. MEMP is a better house in a bad neighborhood, but it needs to face reality that is being forced on all of us. There is no money here anymore. Hope is not a strategy. If any wells can be plugged without permanently disabling them then do it. If this were a play, it would be King Lear. The future is a long, long ways away.
I'd add Saudi Arabia to that list of culprits. But if Mgmt and BOD were our relatives, we'd suggest that they seek therapy because they are out of touch with reality. They have no company with oil at these prices. Eliminate the dividend. Have as many layoffs as you can stand and simply spend only enough to keep wells from falling into a state of collapse. RE-vision the future for BBEP. What it was got destroyed. Mothball what we can until OPEC or others implode. Irrational behavior by others prevents BBEP from acting as it did before. The reality for the next two years is BBEP can't pay a dividend. Manage cash flow based on hedges.
I wouldn't want to be them, but there it is. BBEP is almost gone in the sense it existed before. "Wake up and smell the coffee and seek professional therapy."--Ann Landers. BBEP must become something it didn't plan to be. Sorry. We all lost. $2 / share who would have believed it. Now what?
In BBEP's earnings release of Aug 6 production was 5 MMBoe for the Quarter. This is about 20 million a year so 20 MMBoe times $60 = $1.2 Billion lost revenue. I think the decimal point needs to be moved. It's still a big number but not $1.37 Trillion. So about $2.2 Billion in 2 years. Keep pushing that number out and we see why stock has declined so much. Money is going away. Still your point that we've been crushed is not to be missed!
Declines have a life of their own. I got killed on BBEP and now in MEMP. Now pundits are predicting $30 / barrel oil. I should put some oil in my cellar at that price. This selling will not let up until producers finally stop pumping. Time for a vacation. This will go to what $3 before it's over. I hope desperately to be wrong, totally wrong. Honestly, I don't know why management of both BBEP and MEMP don't just suspend the dividends now and get this death by a thousand cuts over with. Oil MLPs are finished for now. They will come back but not for years now. "Eat bread and salt and speak the truth." Best to all.
I also own Breitburn Energy Partners (BBEP). They are on a similar trajectory. Whoever is bailing will not stop. It just triggers more losses. Expect the worse. It will end but not until MEMP is unimaginably low. Institutions don't want to be caught dead with this in their portfolios and there are not enough small investors to buy up all the stock that's getting dumped. Can be bought lower yet. Best wishes.
No load means they don't charge an upfront fee to purchase mutual fund shares. Everyone gets paid so it's in the expenses ultimately. But you still stand a better chance of making money by buying T Rowe Price or Vanguard funds rather than funds where the financial planner gets a cut as soon as you buy.
Production up, loss not as bad as it might have been. Price up at open then down like a stone. (7-29-15) Reminds me one of his jokes: "I'm not a sexy guy. I went to a #$%$. I dropped my pants. She dropped her price." Substitute "broker" for "#$%$". No respect. I'd like to see some of these sellers run this company better. Oh well. Still hanging on.
If I had it all to do over, I'd get a mutual fund with oil and spread risk. XOM will buy one of these listed below (but not Royal Dutch or Airgas or MLPs). This is T Rowe Price New Era fund (no load). Top holdings. Symbol PRNEX -- "Buy at the sound of canons, sell at the sound of Trumpets" - Baron Rothschild
Pioneer Natural Resources Compa PXD
Exxon Mobil Corporation Common XOM
Concho Resources Inc. Common St CXO
Cimarex Energy Co Common Stock XEC
NiSource Inc Common Stock NI
Royal Dutch Shell PLC ADR Class A RDS.A.L
EQT Corporation Common Stock EQT
Anadarko Petroleum Corporation APC
Airgas, Inc. Common Stock ARG
Occidental Petroleum Corporation
MEMP is like a character in a movie that is getting beaten up. As soon as he gets to his knees the bad guys kick him in the ribs again and again. They taunt him with "you want some more?" Every time MEMP raises its head, shorts come along and sell. Maybe whack-a-mole is better analogy. Best to longs. This is the trial of strength and determination. Think of the battles in the Lord of the Rings. Here's to you!
All these posts about PXD going to $70 then $40 then $20 then $0 are actually a very good sign. It shows a capitulation mindset. No one wants to own this thing now and those that do still want to get out to salvage something. It's a normal reaction. Still more down to come (but we've seen the worst I think) but few posts like this until most of the money that will be lost is already gone. Still tread cautiously, but we are closer to up than down. We can't run our industries on air.
After all the agony of asset sales, proxy fights, and even exploration success, none of that matters. I've owned HESS for years and never made a dime. Now must wait longer. I'm certain money managers/mutual funds when they meet all agree to sell oils. They don't want to show oil stocks in their portfolios. So there is only one action to take an that is to sell and if HES goes up then sell some more.
But the more troubling aspect is that as others lose faith and patience, when the price goes up ANY there will be pressure to sell from people who just want to get their money back. So my friends, this thing will be down for a lot longer than anyone wants to even think about. I'm guessing that for every down day you will need to two up days. One to fill in and another one to fill in for the guy who is glad for any uptick to get out. Remember the story of Job from the Bible? Well change Job to John Hess/Hess Stockholders and that's what's happening. All our sheep fall ill and all the crops fail. Only question is how long does it take to get to the part where Job's lands are restored? Bless HES, bless your holdings. And hang on for dear life.
July 20 --- absolutely more oversold (and likely to go lower).
Sorry to be the bearer of bad news, but these continuous down days act as there own trigger driving down others as downward price triggers get tripped more and more. Self fulfilling prophecy and all that. It's not the end of the world but it's starting to feel that way. Once all the price triggers and stops have finally been executed this carnage may stop. Then again earnings season could trigger some more. Best thing is to set up a separate portfolio account for all the oils and move them all there. You'll feel better because almost everything else is going up I own! Some days it's wrong to be a long term investor and this is one of them. But selling here would be like selling a car that still could go another 100,000 miles for $500. Beat me black and blue--please sir can I have another?
It will eventually stop but not until they've gotten tired of kicking it down and down. Best to longs. I hope Saudi Arabia runs out of money soon!
So imagine the market maker and a reverse auction "Do I hear $70, do I hear $69" and so it goes day after day. They lower it $1 a day. Seven more weeks to Labor Day so $35 by then at this rate. Just playing with the logical conclusion to this living nightmare! The fact is the price of oil is swirling around a drain it seems. I know there is a bottom, but there is a downward price pressure that takes on a life of its own. I jus wish everyone who is going to sell would just go ahead and do it so we can end this death by a thousand cuts.
Best to all. Can't buy and can't sell so it will drift lower. Who would buy when it keeps going down? The phycology (Psychosis?) of the market will drive this puppy lower. Hang in there.
April 27 was last press release and dividend announcement. Ex Date was May 4. If they stick to that schedule announcement will be next Monday, July 27 and Ex Dividend date will be August 3. So either way we will know pretty soon. It's just a god-awful situation to be in an upstream MLP when oil keeps going down. Time will take care of it but who would have believed MEMP would be at $12. Unfortunately, I'm in BBEP too and am still incredulous at how much if keeps on dropping. Best to all. Only when Saudia Arabia gets their head out of the sand (to say it nicely) can we expect any rise in our stock.