- Kinder Morgan (KMI -1.8%) opens lower, perhaps in response to a new bearish thesis on the company from Valuentum Securities president Brian Nelson, who outlines five reasons why KMI shares will "collapse."
- Like some previous negative commentary, Nelson questions the solidity of KMI's underlying earnings, but he also argues that the company’s debt load “is downright scary."
- Nelson writes that KMI's debt (net of cash) was $42.8B in Q1 vs. $40.6B in the year-ago quarter, and the debt-to-EBITDA ratio was 5.8x vs. 5.5x in last year’s quarter; he adds that KMI is “not generating organic free operating cash flow, and it had just $315M in cash on the balance sheet at last check."
- "We’re going to see something really bad happen to Kinder Morgan shareholders very soon... We’re not sticking around to find out how bad," Nelson writes.
- The piece first appeared yesterday on Yahoo Finance but was referenced in a Barron's column published last night.