Well when you look at this in total...with everything that is being thrown at the market these past few weeks...and we're down all of 60 points today. The MLP index is down 2 and change but off the lows. And it has had a habit of coming back in the final hour so we'll hold judgement until days end.
Meanwhile Nustar Holdings (NSH) Alliance Resource Partners (ARLP) Inergy Partners (NRGY) Holly Partners (HEP) and Williams Partners (WPZ) all down 1 to 2 points. Natural Resource (NRP) Eagle Rock (EROC) Buckeye (BPL) and General Marine (GMR) and a few others are down major fractions.
Hiland LP (HLND) is up 1. DCP Midstream is up 64 cents and Constellation (CEP) is up 57 cents and both are ex- distribution....which is nice. Those 2 are among a small list of winners.
Linn Energy is down 4 cents and off the lows as of this posting on shrinking volume. That could mean that we may be finally running out of sellers. Or they could be just taking a break. It can't go down forever. Also an insider is stepping up to the plate and has done an open market buy at Boardwalk Partners (BWP). and THIS JUST IN...another insider has done some at the market buys at Boardwalk.
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- joewxman
- a meteorologist with a knack for trading and investing in MLPS! I also like horse racing, enjoy cigars and a good port wine.
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5 comments:
Joe. Doesn't it bother you that LINN's CEO and a small group of hedge funds bought a billion dollars worth of units at over a 10% discount and then short sold it in mass to lock in their profit?
The covered these shorts last week with the units they converted in the registration.
It just doesn't smell right to me.
do we have a filing which shows this is the case?
Yes. Look at the SEC filings link on the LINN site. Sept 17th S-3 registration statement. Page 45 shows who is converting D units to regulars units. Page 53 shows the D units were issued at 30.97 on Aug 31st which appears to me to be a 10.7% discount to the closing price on that day. What you can't see in the filings is how the short interest jumped from 7% to 17% when the units were issued and they dropped last week when they were converted. I guess they should call this legal insider trading!
what we don't know is who did the shorting. You can't assume it was corporate insiders. There are many hedge funds playing arbitrage games with this sort of stuff. The conversion btw did not occur until 11/1. So there was selling ahead of it which makes sense.
You are right ... the insiders are not allowed to short their own stock of course. I am sure it was the funds in the deal that did the shorting. They also did a boat load of call selling!!
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