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Bryce_in_TX

Bryce_in_TX
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  • Linn Energy: Something's Got To Give [View article]
    "i know the facts"

    No, you don't. A 40% reduction in revenue is not factual for LINE. You are an antagonist, for whatever reason. I have had two of your posts deleted by SA because they crossed the line of what is acceptable. I have also asked SA to ask you to tone it down or be banned. Keep it up and I'll ask again.
    Dec 23, 2014. 09:39 PM | 5 Likes Like |Link to Comment
  • Linn Energy: Something's Got To Give [View article]
    Mark,

    I don't disagree. But LINE isn't going to lose 40% of its revenue in the next 2 years. That was a huge exaggeration by GW.

    I have serious doubts oil will remain at $60 or below beyond a year. Time will tell.
    Dec 23, 2014. 09:34 PM | 2 Likes Like |Link to Comment
  • Linn Energy: Something's Got To Give [View article]
    I said highly leveraged. LCGY is one, VNR is highly leveraged but less than LINE. Most of the upstream MLPS' leverage runs in excess of 100% of equity and in some cases 200 to 300%.

    You are a catastrophizer, plain and simple. Anyone reading your posts can see that. And the only company you comment on is LINE.

    You see things in "black and white", and blow things out of proportion and think worst case.
    Dec 23, 2014. 09:31 PM | 4 Likes Like |Link to Comment
  • Technological Disruption Will Wreck LifeLock [View article]
    I'm simply arguing that Goodwill is not just a plug to make a balance sheet balance. Companies don't pay a price that is above the FMV of identifiable assets just for fun. They anticipate getting more value out of the purchased company than the identifiable assets, in the form of cash flows. Sometimes it doesn't work out and write downs or impairments are necessary. But to say that Goodwill has no economic value seems absurd to me. I don't need an economic or financial model to understand that.
    Dec 23, 2014. 01:45 PM | Likes Like |Link to Comment
  • Linn Energy: Something's Got To Give [View article]
    "For anyone here to argue that LINE can see a 40% drop in revenues,"

    For 2015, it's about 40% of production that isn't hedge, not a 40% drop in revenue. Jeez. A $430 million or about drop in revenue in 2015 (assuming $60 a barrel for unhedged production), to about $3.495 billion, from about $3.926 billion this year. That's an 11% drop, not 40%. Then a $592 million or so drop in 2016 to about $3.334 billion, from 2014 level, equates to a 15% drop, not 40%.

    If you check the debt to equity levels of other upstream MLPs, it's the same for them as well. LINE isn't alone in their debt to equity ratio being high.

    Talk about cognitive distortion and catastrophic thinking, you got it big time, GW.
    Dec 23, 2014. 01:31 PM | 6 Likes Like |Link to Comment
  • Technological Disruption Will Wreck LifeLock [View article]
    I disagree. No, Goodwill is not just a plug.

    I've already addressed this a month ago. If Goodwill has no value, is just a plug, and does not impact cash flow, then it is stupid for a company to pay for it. But they do because there is economic value in Goodwill. In your link, there are assets listed, i.e the value of synergy, the value of control, the value of growth assets, which are not individually identified but are assets nevertheless. That is exactly what I said in my post. They impact future cash flows.

    Just because individual assets are not identified, but are called "Goodwill" doesn't mean that it has no economic value. Again, if that were true then companies would not pay above the cost of FMV of identifiable assets.

    Accounting earnings eventually become cash flows, if not immediately. Accrual accounting is a better measure of economic performance than cash basis accounting. Examples are treating inventory as assets until sold rather than counting it all as expense when purchased, and credit transactions. Credit transactions are not even counted under cash basis accounting. So, when you sell a car with a 5% down payment and 95% on a loan, when is the sale made, when the cash is collected or when the transaction takes place? So, I agree, accounting earnings is not the same as cash flow, in that sense.
    Dec 23, 2014. 01:29 AM | Likes Like |Link to Comment
  • Do Not Short Tesla Stock [View article]
    solucky,

    He was also wrong about INTEL.
    Dec 22, 2014. 12:58 PM | 2 Likes Like |Link to Comment
  • Do Not Short Tesla Stock [View article]
    "As long as oil stabilizes"

    Wow, the reason for the recent uptick in oil has been expiration of derivatives, IMO. Note the downward trend in oil has started again today, after those derivatives are no longer on play.
    Dec 22, 2014. 12:57 PM | 1 Like Like |Link to Comment
  • Do Not Short Tesla Stock [View article]
    It is recommended that the tires be rotated, checked every 5,000 miles. Some have had to replace tires after 10,000 to 12,000 miles with the 21 inch tires. Looks like the better choice is the 19 inch tire which lasts longer. Some have also had a problem with the drivetrains both in the U.S. and Norway. Tesla is quick to fix the problem and the drive train is warrantied for 8 years, so hopefully the drivetrain is not a concern. But there is a small amount of maintenance on the tires and I would watch them closely to insure that wear is not excessive.

    http://bit.ly/1zOnB7W

    http://bit.ly/1AL00ES
    Dec 22, 2014. 12:50 PM | 1 Like Like |Link to Comment
  • What If Linn Energy 'Pulls A Seadrill?' [View article]
    Trying to claim that Casey is guilty of any wrong doing by these companies simply because he worked for them is the height of prejudice and ignorance, and it shows a lack of respect as well. It shows a real lack of intelligence and ability to make judgements based on facts.
    Dec 21, 2014. 03:53 PM | 2 Likes Like |Link to Comment
  • The Future Of Microsoft: Windows 10 Goes Both Ways [View article]
    I like the Mac and don't like the direction MSFT has taken. I prefer an OS that does one thing well, rather than trying to do everything less well. MSFT is dead to me after Win 7.

    I sold Macs back in 1986. It was a superior consumer computer back then, compared to an IBM compatible. Ever try running a program from the Dos prompt or backing up your floppy or hard disk typing in commands? Mac was just point and click and drag and drop. MSFT got something similar in the early 1990s. I can still run Windows apps with a Mac.

    I don't have a smart phone or need for a server. Just keep it simple stupid (KISS principle).

    Freedom, like having to run a virus program regularly or a program to fix my Windows registry? Or having to switch OS because the current version won't run my old software? Or wait for the Updates to finish?
    Dec 21, 2014. 03:33 PM | Likes Like |Link to Comment
  • Linn Energy: Something's Got To Give [View article]
    Gas in my city is averaging $1.95 with the lowest price at $1.89. Wow. Unreal.

    http://bit.ly/1wsllla
    Dec 20, 2014. 07:13 AM | Likes Like |Link to Comment
  • Linn Energy: Something's Got To Give [View article]
    I realize that LINE was in compliance with all covenants as of September 30, 2014 (most recent 10-Q). What I was really taking issue with was if oil stayed at $60 a barrel through 2017 per your comment: "At $14 per share for LINE, $60 WTI oil, and $3.60 Henry Hub gas, LINE could pay a 20% dividend in 2015, a 16% dividend in 2016 and a 12% dividend in 2017 while still maintaining a coverage ratio of 1.1x."

    That would imply an extended decline in the price of oil and I see it as detrimental to LINE and the oil industry in general. I personally think this won't happen, but if it did I would think LINE's borrowing base may be reduced, and that the prolonged price decline might trigger some debt being called in prior to its maturity due to the assets losing a material portion of their value, value which existed when the loans were made. What I just said is just common sense to me.

    One can make a blanket statement that the notes are not due for almost 5 years, but those notes were made when the asset values or reserve values were materially higher because the price of oil was materially higher. That's the way I reason it anyway. So, if the asset values drop for an extended period of time, 3 years or more (hedges on oil largely roll off in two years), it makes sense to me that the cash flows from these assets may not be as great as was thought when the loans were made, hence the assets are not worth as much as when the loans were made, hence the loan amount may be adjusted downward and LINE might have to pay some cash in to cover the adjustment. If I am not being logical or reasonable, in this scenario, please point out my fallacies in my logic.

    From page 12 of the 3rd qtr 10-Q:

    " The Company’s obligations under the LINN Credit Facility are secured by mortgages on certain of its material subsidiaries’ oil and natural gas properties and other personal property as well as a pledge of all ownership interests in the Company’s direct and indirect material subsidiaries. The Company is required to maintain either: 1) mortgages on properties representing at least 80% of the total value of oil and natural gas properties included on its most recent reserve report, or 2) a Collateral Coverage Ratio of at least 2.5 to 1. Collateral Coverage Ratio is defined as the ratio of the present value of future cash flows from proved reserves from the currently mortgaged properties to the lesser of:
    (i) the then-effective borrowing base and (ii) the maximum commitment amount. Additionally, the obligations under the LINN Credit Facility are
    guaranteed by all of the Company’s material subsidiaries, other than Berry, and are required to be guaranteed by any future material subsidiaries. TheCompany is in compliance with all financial and oth
    er covenants of the LINN Credit Facility."

    LINE is required to carry mortgages on properties as collateral against the credit facility. If the value of the properties declines materially and stays in such a decline for 3 years or more, it makes sense that an adjustment in the credit facility might be made; to me anyway. The hedges protect LINE for the most part through 2016, but there is only about 20% of oil production covered in 2017

    From page 17 of the 3rd qtr 10-Q:
    "The Company’s senior notes contain covenants that, among other things, may limit its ability to: (i) pay distributions on, purchase or redeem the
    Company’s units or redeem its subordinated debt; (ii) make investments; (iii) incur or guarantee additional indebtedness or issue certain types of
    equity securities; (iv) create certain liens; (v) sell assets; (vi) consolidate, merge or transfer all or substantially all of the Company’s assets; (vii) enter into agreements that restrict distributions or other payments from the Company’s restricted subsidiaries to the Company; (viii) engage in transactions with affiliates; and (ix) create unrestricted subsidiaries."

    It also makes sense to me that such a prolonged retracement of oil prices might cause a significant reduction in the amount of distributions or a suspension at some point, in order to pay down the debt.

    Again, I think this is an unlikely scenario. But, that is how I interpreted your statement.

    http://1.usa.gov/1txRnJd
    Dec 20, 2014. 06:18 AM | 2 Likes Like |Link to Comment
  • Linn Energy: Something's Got To Give [View article]
    "Bryce - I welcome any research you choose to disclose on what specific covenants you are concerned about. I have not found any issues."

    I don't have access to the documents, or know how the calculations are made to determine if asset values are within specific acceptable boundaries. IF you do and do know, how about sharing that very valuable knowledge with us.

    "I have not found any issues." That would imply you do have knowledge of the debt covenants.
    Dec 19, 2014. 03:11 PM | Likes Like |Link to Comment
  • Lawsuit accuses Schorsch of ordering accounting shenanigans [View news story]
    Mark,

    I have studied Enron, some of the transactions in depth. How anyone, especially a CPA, could have concluded those transactions were within FASB guidelines is beyond me. Their own code of ethics prevented Fastow from being involved in the SPEs, but they and the BOD over rode that. Crazy. I've forgotten most of what I studied now, but hedging with yourself to prevent Mark to Market losses? Come on. And in the Blockbuster deal, recording a little over $100 million in revenue on their Broadband division when it wasn't yet in operation, just a pilot program where most of the subscribers were non paying? Then you have the McGarrett I or II transactions where Enron was guaranteeing the debt of the SPE would be paid back to the bank and Enron still was the primary beneficiary of the deal. I don't need a law firm to tell me all of that doesn't fall within FASB guidelines. The SPEs were clearly not indepedent of Enron. Did Duncan and Causey get their CPA certificates out of a cracker jax box? What the hell were they thinking? And there was a lot more. I didn't fall off the turnip truck yesterday.

    David Duncan and Causey and Fastow were all crooks. The firm, Arthur Andersen, was unfairly tarnished and put out of business, but these guys I mentioned are crooks. It sounds like the Justice department in prosecuting the case over stepped their bounds as well. America, so messed up in a lot of ways.
    Dec 19, 2014. 12:40 PM | Likes Like |Link to Comment
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