When it comes to the current bonfire of the MLPs, it’s easy to blame the carnage on the end of the commodity cycle, washing one’s hands entirely of the role played by the actual structure and promises of the products themselves.
But that would not be fair. These are and always have been poorly-thought-out high-risk products, with the end of the commodity cycle simply suspending the endless capital inflows which had hitherto disguised the unsustainable nature of the underlying investments in a no-growth environment. Read more
This is the stock performance of Kinder Morgan Inc, a diversified US energy company, primarily engaged in the movement of natural gas, crude oil, petroleum products, CO2, coal, and other commodities since it self acquired itself last year and stopped being an MLP:
The $44bn self-acquisition of Kinder Morgan has been heralded by some as a great deal for shareholders.
But is it? Is it really? At least for the ordinary investors?
We’ve already wondered about the motivation for the deal.
Among our initial thoughts: Kinder Morgan MLP units trading under the KMP ticker had got expensive due to the heavy promotion of MLP structures as a safe-ish and yieldy investment at a time of low interest rates.
But we now think there may be more to it than that. Read more