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About Me
- 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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4 comments:
WPZ. Anyone out there involved in this one? I've bought a little over the last few months. Seems like it can't get out of it's own way.
The volumes in MLP's are anemic. There seems to be absolutely no belief in these things. You can destroy an MLP's price by selling 5000 shares. It is a pathetic state of affairs. Where are the yield hogs? 8-10% yields when a one year CD is 3.50% sounds like a reasonable trade to me.
WPZ has the highest capex as a percentage of market cap of any MLP in 2008. They will have to raise a ton of equity via PIPES and the funds that buy these offerings are crushing the units in advance. They drive the unit price down massively and then buy it at a steep discount from that price. Nice work if you can get it. This PIPE overhang is the main reason MLPs suck right now ... and there really an end in sight I am afraid.
Corporate management of MLP's need to get more creative. The issuance of PIPE's is a disgraceful destruction of investor wealth. PIPE's are a disaster for existing unitholders.
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