Energy Transfer CFO Exit Spooks MLP Investors; ETE Down 40%
By Amey Stone
Shares of midstream energy master limited partnership Energy Transfer Equity (ETE) were down 40% to $2.65 Monday as the sudden and unexplained departure of Chief Financial Officer Jamie Welch created new questions about the direction of the company.
Williams (WMB), which is in the midst of a controversial merger with ETE, was also down a jarring 35% Monday afternoon to $11 a share.
Other MLPs also suffered steep declines Monday, which included analyst downgrades and abearish outlook from a prominent analyst profiled in Barron’s. The sector-tracking Alerian MLP ETF (AMLP) was off by 9%.
The trouble started late Friday when Energy Transfer filed an 8K stating that Welch was replaced by Thomas E. Long, the CFO of subsidiary Energy Transfer Partners (ETP). Investors found the brief and buried announcement troubling. Baird analyst Ethan Bellamycalled the release, “disturbingly brief.”
Monday, after the shares plummeted, ETE released a follow-up 8K filing saying that Welch may still consult at the company. It also stated:
In addition, in response to inquiries from various parties, the Partnership affirms that the replacement of Mr. Welch as Chief Financial Officer of the Partnership was not based on any disagreement with respect to any accounting or financial matter involving the Partnership or any of its affiliates.
So far, the latest release hasn’t done much to assuage investor panic....MORE
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