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Energy

Linn Energy Shares Tumbling on SEC Inquiry

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By Paul Ausick Updated Published
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Drilling Rig

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Shares of Linn Energy LLC (NASDAQ: LINE) and its subsidiary LinnCo LLC (NASDAQ: LNCO) are tumbling today after an announcement last night that the U.S. Securities and Exchange Commission (SEC) is launching a “private, non-public” inquiry into the companies’ proposed purchase of Berry Petroleum Co. (NYSE: BRY) and into the companies’ use on non-GAAP financial practices and hedging activities.

In a press release, Linn said that the effect on the proposed merger is “difficult to predict,” but the companies remain committed to the merger. The deal was planned to close after Linn Energy’s shareholder meeting, which had been scheduled for the third quarter of this year.

The Linn companies expected the acquisition to add $0.40 a share to distributable cash flow in the first full year following the transaction, and Linn Energy’s management recently boosted its dividend from $2.90 to $3.08. LinnCo also pays a dividend of $3.08.

Shares of Linn Energy are down 18% in the mid-afternoon today, at $27.35 after posting a new 52-week low of $57.11. The 52-week high is $42.57.

LinnCo’s shares are down nearly 17% at $30.91 after posting a new 52-week low of $30.63. The 52-week high is $44.20.

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About the Author Paul Ausick →

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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