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Hedgeye is using social media to sink Richard Kinder. Their top energy analyst Kevin Kaiser is calling Kinder a bubble and ready to implode. In fact, Kinder has been a bubble for years.

McCullough is now a master at MLPs and LLCs after banging on Linn this summer through Barron's and Hedgeye analyst reports. He timed it perfectly--the SEC started an informal enquiry coinciding with his short attack and Linn dropped faster than the price of natgas in an excess storage capacity environment. Linn has yet to recover. The last 2 Qs were worrisome as distributions exceeded distributable cash. Ethane rejection is hurting production and revenue. The Berry acquisition went into limbo and investors are waiting to see what happens.

Kaiser has been at this energy thingie for all of 3 or 4 years and is now taking Richard Kinder down tweeting that KMP et al are a house of cards. In fact, he has yet to release the report, instead relying on social media to crash the stock. Unfortunately, this works great these days and its pretty easy for shorts to get a stock moving down with little to no fundamental analysis. Even with Linn's demise, his case against the company was mostly ill-informed. His arguments against Kinder should be even thinner.His report is due out Sept 10.

Sometime on Tuesday, a 26-year-old man with a fancy title and very limited work experience is going to elaborate claims he made yesterday that the largest US midstream MLP, founded by an industry legend, is “a house of cards.”

But in the meantime, investors rushing for the exits Wednesday on his fact-free say-so dropped roughly $4 billion at the turnstiles.

This is modern “investing” at its most pathetic and absurd, in which unsophisticated income seekers interested only in yield flee for the presumed safety of cash at the first hint of trouble. This has made hinting at trouble profitable in the extreme. There are now opportunities aplenty to pick up other people’s loose change, provided you’re not the type to drop yours because someone tweeted something.

KMI is now at $35.50 and yielding 4.2%.KMP is around $80 and yielding 6.5%.

Not everyone takes him seriously. Apparently he is getting blocked by a few at Twitter

From Blodgett with some slight sarcasm:

Hedgeye CEO Keith McCullough: Sell All U.S. Stocks NOW


MAY 28, 2010, 12:12 PM 5,180 12

Earlier this week, Hedgeye Risk Management made a bold call: SELL ALL U.S. STOCKS NOW.

This was a short-term call, which the firm plans to revisit if/when the S&P 500 hits 1,070. But Hedgeye CEO Keith McCullough is plenty bearish over the long-term, too, and expects a U.S. implosion similar to Europe's when the country's debt-maturity calendar goes into overdrive in 2011-2012.

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Linn is yielding almost 13% at $24 and the shortfall for distribution was 7¢ per share in Q2. This could be easily cut and the distribution would still yield 12.5%. Cut it in half (now $3.08) and the yield is 6.4%. There is now doubt Linn is hugely risky but you are getting well paid to take the risk at current yields if the berry acquisition goes through, the stock will bounce. They paid off some debt in Q2 and interest expense is being targeted to drop making the distributable cash higher.

I generally learn a lot from short sellers and love Muddy Waters research and Citron. However, dog and pony shows like Ackman's Herbal Life and now the crashing of a great company just by mentioning it as a house of cards on Twitter are offensive.
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