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It's understandable that MLP investors would be irritated as several - Calumet Specialty (CLMT)...

It's understandable that MLP investors would be irritated as several - Calumet Specialty (CLMT) and Access Midstream (ACMP) are the latest - again revisit the trough for more capital and dilute their holdings, but demand for MLPs is so strong that unit prices of some involved in recent financings - BWP, DPM, EPB, EPD, MCEP - already have recouped initial losses and gained since their announcements.
Comments (18)
  • That's what MLP's do. Why would an investor be irritated?
    26 Mar 2013, 06:57 PM Reply Like
  • Because half the people on this website don't realize an MLP is different than a corporation.
    26 Mar 2013, 08:30 PM Reply Like
  • Great time to add!
    26 Mar 2013, 06:58 PM Reply Like
  • Traders are irritated because they are playing a trade and have zero interest in the long term.
    26 Mar 2013, 07:00 PM Reply Like
  • How else would they be able grow and pay out hefty distributions if they didn't borrow and raise partnership capital via equity offerings. This is normal behaviour for an MLP.
    26 Mar 2013, 07:02 PM Reply Like
  • Agree with both my amigos above.. These events seem to be the only way to get in and get that extra yield an price protection with a little patience. BDCs too ! I have a big bunch of both and actually lean towards BDCs out performing the next few years as the economy is finally getting going and banks only lend to folks ( companies ) who donĀ“t need it !


    I am bidding now !
    26 Mar 2013, 07:04 PM Reply Like
  • explain please what are BDCs
    27 Mar 2013, 01:59 AM Reply Like
  • @markboug, welcome ! BDCs are Business Development Corporations Here is a SA link to an author who writes about them and you can see almost all the major ones via his work !
    27 Mar 2013, 03:08 AM Reply Like
  • @markboug. Please research tax implications for MLP's and BDC's. These can have an impact and need to be filed a little differently. Great yields but don't tax like a stock....
    27 Mar 2013, 07:16 AM Reply Like
  • I own both $CLMT and $ACMP...doesn't bother me a bit.
    26 Mar 2013, 07:04 PM Reply Like
  • This "news clip" shows again a basic misunderstanding of MLPs.
    The share issuance is a relatively inexpensive capital acquisition tool with which to expand the underlying business and thereby distributable cash flow. It is often misperceived as "dilution" which it would only be if the MLP had poor management that did not use the capital for accretive purposes.
    26 Mar 2013, 07:07 PM Reply Like
  • The MLP fever and their generous yields has attracted many to this space that just don't understand the concept. By distributing nearly 100% of their cash flow they MUST go to the capital markets to keep growing. Traditional C-Corps keep most of their net income in retained earnings here and abroad and eventually squander it away with untimely buybacks or overpriced acquisitions.
    26 Mar 2013, 10:38 PM Reply Like
  • I think the irritation comes from the (usually) temporary drop in price when the new offering is priced at a discount to the market. Lots of ways to play that if you are doing your own trading and want to take advantage.
    26 Mar 2013, 07:10 PM Reply Like
  • $AMLP , very large position, still think it takes ten years to build-out & tie-in everything.
    26 Mar 2013, 07:13 PM Reply Like
  • I think we will need a bit longer than that, gotta stop that useless flaring going on. Capture and sell, don't just make hot air lol
    26 Mar 2013, 07:16 PM Reply Like
  • MEMP, just did an offering and it barely effected the share price. Wish it would have dropped it more.
    26 Mar 2013, 08:32 PM Reply Like
  • EPD just notched another all time high. Years worth of consecutive distribution increases demonstrates the power of this company. One of the prettiest charts ever. I am long EPD.
    26 Mar 2013, 09:25 PM Reply Like
  • das555 is correct. MLPs SELL new issue shares and get Capital to immediately pay off loans and build out more income producing capacity. Thus there is no "dilution" in effect, merely growth by a few simple stages: Shares for money, money pays off debts, and rest of money buys additional capacity to earn more income for shareholders.
    So, existing shareholders end up with a smaller portion ownership of a bigger more productive business, and exactly same "equity" as before! Short term no change. Long term as more income is produced value of business goes up, as does share price, and shareholders are richer two ways: increased income and increased value of shares held. Keep it coming MLPs and thank you!
    27 Mar 2013, 01:34 AM Reply Like
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