Below please find an update on the total number of shares and units sold short across the four Kinder Morgan entities (as an indicator of how much traction Hedgeye’s short thesis is achieving in the market place). The following chart shows the total number of units or shares sold short for each name since September of 2012. The data is somewhat delayed, typically 10-12 days.
(Click to view)
The vertical black dashed lines under the “X’s” mark the Ex-Dividend or Ex-Distribution dates for the entities. You may notice that some of the short positions tend to get covered prior to the Ex dates so they do not have to pay the dividends/distributions. Technically the data is as of the close on the date shown and not continuous data for every day, so the entire short position could be covered prior to the Ex date and then put back on the following day.
Two week change in the amount of units/shares sold short:
- KMI: Down 6.8%
- KMP: Up 1.9%
- KMR: Up 10.4%
- EPB: Up 30.3%
Hedgeye’s short thesis continues to gain traction with market participants.
If you are a retail investor and playing along with shorting these names, please pay attention to the Ex-Dividend / Ex-Distribution dates so you don’t also have to pay the dividend/distributions. In addition, you should also take into account your additional cost to borrow each security from your broker. Many MLPs are naturally “Hard to Borrow” so assuming your broker finds you units to borrow to short they will likely charge a high rate.