Author Topic: KMI - Kinder Morgan  (Read 134261 times)

CorpRaider

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Re: KMI - Kinder Morgan
« Reply #90 on: February 28, 2014, 01:03:53 PM »
Hey, stupid question here, but since the warrants are going to be net share settled, that means a holder won't have to put up any cash on expiration to exercise (assuming the warrants are in the money), right?  Warrant holders will rather be given common shares, the FMV of which is equal to the amount by which the common price exceeds the strike on the settlement date, no  (i.e. this will be a "cashless exercise")?

PLS don't go to any trouble to figure it out, I will do the reading, just thought one of you options gurus may have this answer at hand.

Thanks.

W/R/T to KMR, he could have foreseen some of the slower growth/hiccups in El Paso.  If he wanted to invest solely in KMP/KMR, then the rationale in the slides probably explains it.
« Last Edit: February 28, 2014, 01:08:20 PM by CorpRaider »


ItsAValueTrap

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Re: KMI - Kinder Morgan
« Reply #91 on: February 28, 2014, 01:24:04 PM »
SEC filing for the warrants are here:
http://www.sec.gov/Archives/edgar/data/1506307/000119312512255687/d355500d424b3.htm#toc355500_5

You get the choice of either cash or cashless exercise.

Hmm the document for some reason doesn't mention what happens to fractional shares.
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CorpRaider

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Re: KMI - Kinder Morgan
« Reply #92 on: February 28, 2014, 01:27:42 PM »
Thanks.  I bought more than I had intended.  It is hard for me to resist buying at prices below those paid by Mr. Morgan, of Kinder Morgan.  I've got to quit buying or else I'm going to have to move into Mr. Kinder's garage if things don't go well.  heh.
« Last Edit: February 28, 2014, 03:19:42 PM by CorpRaider »

yader

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Re: KMI - Kinder Morgan
« Reply #93 on: February 28, 2014, 04:21:16 PM »
Corp-

Just a thought: Mr. Morgan purchased 6 mil in KMI recently.  Owning over 8 bil of KMI and so little of KMP/KMR his bias is clear.  So why isn't he purchasing the warrants?  Could it be he doesn't see 42 by 2017 but does see higher than the current valuation?
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CorpRaider

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Re: KMI - Kinder Morgan
« Reply #94 on: February 28, 2014, 04:30:41 PM »
Yep, could be.  I can't really make the case that there is insufficient liquidity, either as I believe 54 million warrants changed hands the other day.  I think Lone Pine and Morgan bought the warrants though and both paid more than me.
« Last Edit: February 28, 2014, 04:37:12 PM by CorpRaider »

thomcapital

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Re: KMI - Kinder Morgan
« Reply #95 on: February 28, 2014, 04:58:06 PM »
Corp-

Just a thought: Mr. Morgan purchased 6 mil in KMI recently.  Owning over 8 bil of KMI and so little of KMP/KMR his bias is clear.  So why isn't he purchasing the warrants?  Could it be he doesn't see 42 by 2017 but does see higher than the current valuation?

And if he doesn't see $42 by 2017, then arguably he has a big incentive to keep the stock under that level, instead. He's gotta be swinging one way or the other I would think.

CorpRaider

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Re: KMI - Kinder Morgan
« Reply #96 on: February 28, 2014, 05:35:30 PM »
Yeah, I suppose it is possible that they are going to do a take under at $39.50.  Though it is a pity that they didn't decide upon that course of action prior to repurchases of warrants at $5+.
« Last Edit: February 28, 2014, 05:37:51 PM by CorpRaider »

thomcapital

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Re: KMI - Kinder Morgan
« Reply #97 on: February 28, 2014, 05:46:30 PM »
Yeah, I suppose it is possible that they are going to do a take under at $39.50.  Though it is a pity that they didn't decide upon that course of action prior to repurchases of warrants at $5+.

I wasn't necessarily thinking of a take-under, just that if Mr. Kinder can keep the price under ~$42 in 2017, the warrants will expire out of the money and he will avoid the dilution. Who knows?

alertmeipp

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Re: KMI - Kinder Morgan
« Reply #98 on: February 28, 2014, 06:27:17 PM »
Isn't the warrant exercise price @ $40, if share price is $42, warrant should worth $2.

I think the main reason Morgan is buying common not warrants if he is mainly trying to support the common share price and send a message to the market.

He is not trying to leverage like many of us.

Regarding take under, well, there are other large shareholders as well, they will have to approve the deal.

CorpRaider

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Re: KMI - Kinder Morgan
« Reply #99 on: February 28, 2014, 06:41:43 PM »
Yeah, I suppose it is possible that they are going to do a take under at $39.50.  Though it is a pity that they didn't decide upon that course of action prior to repurchases of warrants at $5+.

I wasn't necessarily thinking of a take-under, just that if Mr. Kinder can keep the price under ~$42 in 2017, the warrants will expire out of the money and he will avoid the dilution. Who knows?

Yeah just kidding around.  Who knows is right, but they are buying like a mofo for sure.