John Hempton throws in the towel on his Linn Energy (LINE) short following yesterday's...

John Hempton throws in the towel on his Linn Energy (LINE) short following yesterday's acquisition of Berry Petroleum (BRY). It's a swap of what Hempton believes is near-worthless stock for old, but valuable oil assets. Those assets can generate enough cash to keep what he believes is a Ponzi, rolling for many more years.

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Comments (12)
  • Hillbilly Stock Star
    , contributor
    Comments (746) | Send Message
    The checks keep clearing and every senior citizen within 3,000 miles is long!
    22 Feb 2013, 02:10 PM Reply Like
  • jpm1jr
    , contributor
    Comments (205) | Send Message
    Hempton's analysis of Linn's financials is sophomoric, and wrong. This trade was a loser before the BRY acquisition was announced, now it becomes Hempton's excuse...
    22 Feb 2013, 02:26 PM Reply Like
  • jerrywengler
    , contributor
    Comments (656) | Send Message
    You got it right, Hillbilly! I could only wish that I could get longer on LINE.
    22 Feb 2013, 02:39 PM Reply Like
  • toomuchgas
    , contributor
    Comments (996) | Send Message
    One problem with Linn is its value is predicated on the tax treatment. Those of us who bought come of the Canadian oil trust years ago can vouch that this can be dangerous if the politicians start looking for more tax dollars. Many on the trusts are only worth a third of their previous values. Another similarity is that both need to keep adding assets to maintain their distribution growth.
    22 Feb 2013, 03:06 PM Reply Like
  • smurf
    , contributor
    Comments (6147) | Send Message


    Then buy LNCO. It it is a stalking horse because it was created by and holds LINE shares and nothing else. It is not an MLP. It pays dividends, not distributions. No UBTI, no K-1s. Reports dividends on a 1099. Dividends are similar to LINE's
    22 Feb 2013, 03:23 PM Reply Like
  • toomuchgas
    , contributor
    Comments (996) | Send Message
    If tax treatment is changed for LINE then LNCO would be effected likewise.
    22 Feb 2013, 05:01 PM Reply Like
  • jack20
    , contributor
    Comments (498) | Send Message
    Anyone out there own Petrobakken? Any ideas on why it has been cut in half? Their press release last nite was very positive.
    22 Feb 2013, 03:48 PM Reply Like
  • richard48
    , contributor
    Comments (462) | Send Message
    Looks to me at the current drilling rate that Petrobakken only has 5-6 more years of drilling locations. They also have a decline rate on current wells of about 30% per year. The decline is significant compared to U.S. wells.
    Market indexes are at all time highs and there is a reason Petrobakken shares are cratering. Also, they are paying out all of their excess cash as dividends, so I do not see how they grow acreage for future expansion or drilling.
    22 Feb 2013, 04:24 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2862) | Send Message
    Being short high yield investments is a very expensive bet to make, even if the position doesnt go up. Even if he thought the distribution would get cut, being short LINE is going to cost whatever fee he pays to borrow LINE to sell short, plus the distributions he'll have to pay to whoever he borrowed from. Its not worth the cost, imo.
    22 Feb 2013, 05:58 PM Reply Like
  • sunwriter
    , contributor
    Comments (9) | Send Message
    Or was it attempt to drive the price down so that he (or an accomplice) could get in at a better price than it was trading at prior to his intervention.
    Be suspicious of deprecating comment.
    Be suspicious of apprecating comment.
    Yen is all over the place - on the value of someone's words.
    Euro is all over the place - on the value of someone's words.
    Dow flicks from + to -, on the value of someone's words.
    Stocks move on the basis of someone's words.
    Who is profiting form such moves?
    Who knows what is going to be said (worded) prior to the announcement?
    23 Feb 2013, 07:57 AM Reply Like
  • johnmather
    , contributor
    Comments (7) | Send Message
    I am putting trailing stops on my highest cost shares of LINE and LNCO.
    24 Feb 2013, 03:31 PM Reply Like
    , contributor
    Comments (10) | Send Message
    Yes and every senior citizen is nervous as hell. Who knows what is going to happen.Even the pundits don't know. Sunwriter is right on. Anyone with an agenda of their own seems to be able to move this very nervois market.
    25 Feb 2013, 08:14 PM Reply Like
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