Well, the big news was released on Friday morning with the equity markets closed: Yes, GasLog Ltd. (GLOP) has agreed with the independent board members of GasLog Partners (GLOP) , to buy the 69.8% of GLOP that GLOG doesn't already own for $8.65 per share.
This is a massive win for holders of the GasLog Partners preferreds ( (GLOP-A) , (GLOP-B) , (GLOP-C) ) which includes my firm, Excelsior Capital Partners, and many of my clients. GasLog's press release noted those preferreds will continue to trade publicly, even after the transaction is closed. GasLog has preferred series, GLOG-A, which has continued to trade publicly for nearly two years since the company was taken private in June 2021 by a consortium led by Blackstone and including GasLog's founder, Peter Livanos.
Publicly traded preferreds in a privately held company with no public company expenses (filings, exchange regulations, etc.)? Yes, please! So, along with Tellurian's (TELL) announced sale-leaseback transaction yesterday, a significant portion of ExCap's portfolio has been substantially de-risked in the past 48 hours. Can't lie...feels good.
GLOP-B pays currently floating dividends (London Interbank Offered Rate, plus 5.839%), while GLOP-A, GLOP-C and preferreds issued by the parent GasLog (GLOG-A) are currently paying fixed rates. So, the real risk there is in interest rates.
What is happening to interest rates Friday morning, as the equity markets are closed, but the Treasury markets are temporarily open to react to Friday's jobs report, which was very much in-line with expectations (236,000, 3.5%)? They are rising, but only slightly, with the 10-year U.S. Treasury note yielding 3.346% as of this writing. Equity market futures are also up, but just slightly, on what was, in instant analysis, a nothingburger of a jobs report.
So, the big news is coming from the micro, not the macro. Watch what companies are doing, not what ignorant blowhards on financial television are screaming at the cameras. The jobs gain was the lowest since December 2020. The U.S. economy is grinding to a halt. Jamie Dimon thinks so ... and so does Elon Musk, apparently.
Overnight the news hit the wires that Tesla (TSLA) on Thursday lowered prices for all its models in the U.S. for the fifth time this year. According to Reuters, the cumulative price drops are now 11% on the Model 3 and 20% on the Model Y. This is an Econ 101-style sign that demand for Tesla's EVs is waning. Honestly, in 30 years of following the auto sector, I have never seen such a "death by a thousand cuts" pricing strategy like the one Tesla is using.
Does that tell you the U.S. consumer is healthy? Oh, God, no. So, just avoid her.
Be exposed to fixed income -- floating-rate, if you are worried about higher rates, as I am, fixed if you are not -- and play energy infrastructure all day long. Tellurian-- TELL common and (TELZ) bonds -- to produce liquified natural gas (once Driftwood LNG is completed in 2026 to use natural gas Tellurian already produces in the Haynesville Shale) or GasLog (soon to include the 14 ships owned by GasLog Partners) via the GLOP-A, GLOP-B and GLOP-C preferreds to play the carriage of that LNG around the world.
It all makes sense. Does your portfolio make sense for the current state of the economy?
(Please note that due to factors including low market capitalization and/or insufficient public float, we consider some of these stocks to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.)
