SOME 52 WEEK LOWS POPPING UP
MLPS LOWER (AGAIN)
The new lows list grew by a couple yesterday as Calumet (CLMT) Eagle Rock (EROC) Linn Energy (LINE) Williams Partners (WPZ) occupy space there. All but Linn Energy (LINE) so far today are on the list again. There are no news drivers this morning and no upgrades or downgrades so the year end selling continues. The MLP index is down 1.75 and sitting just above 295. The dow meanwhile is putting in a floor here and looks like it wants to go higher. Maybe we'll get some support later on...maybe not. The mood here is pretty dismal.
Very few stocks on the winner list. Linn Energy (LINE) is seeing a big drop in volume after yesterday's six million shares that crossed including one 4 million share block. I don't know if this means the overhang is over with. I've been fooled before. Nustar (NS) is down 1.21 as the biggest loser. Most MLPS are showing fractional losses.
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5 comments:
Some of the LINE volume is explained by it returning to the Reg.SHO list, so not only do we have a legimate overhang of stock, but as the SHO list is naked shorts, we have counterfeit shares!!
The naked shorts by suppressing price, can make future offerings more difficult.
V
"The naked shorts by suppressing price, can make future offerings more difficult. "
Perhaps that's not such a bad thing. We could use a moratorium on share issues for a while.
Bruce
New shares are frequently the route for the capital for growth.
So artificial suppression of price/sh by naked shorting is a good entry point for investors is the naked shorts exit at some time.
If they stay and keep selling naked(shares that do NOT exist)that is not good. So in essense they(the naked shorts)are doing a secondary that hurts the shareholders and the co.
So major difference between secondary offering vs. naked shorting!!
IMHO
V
at some point those naked shorts have to cover. They can't stay short forever and with the yield valuation stretched beyond normal risk, when they cover it could rise in a hurry.
"at some point those naked shorts have to cover. They can't stay short forever and with the yield valuation stretched beyond normal risk, when they cover it could rise in a hurry."
One would certainly think so. Still, I am amazed at the pounding some MLP's are taking, such as LINE and EROC (both of which I own--and I have been adding a bit to both positions on the way down).
Bruce
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