Ann: Trading Halt, page-62

A heartbeat? Maybe after a few million hearbeats... Your logic is this: LNG should sell shares to raise money to own a greater stake in Magnolia, instantly sell that stake at a 3.5% cap rate and using the profit to then engage in a share buyback of double the shares it initially sold. Unfortunately selling that 14% yielding asset you buy for 3.5% yield doesn't happen instantaneously - the convergence of price and intrinsic value takes time - a key ingredient which is missing in your analysis - the only way to arbitrage this profit over time if the company buys future dated options to buyback at today's price, then waits.

Strategically it also makes no sense to compete with Stonepeak head to head on $ invested. Our competitive advantage is not the provision of capital, and arguably stonepeak have greater ability to crowd us out given LNG cost of capital is greater than Stonepeaks.

I have previously suggested that LNG can own a greater % of Magnolia equity through operational advantage, ie higher tolling fees etc. Those factors work to accrue value in our favour without crowding out Stonepeak.

You also call me myopic but forgot to include the impact on the valuation of BH and optionality against future projects.

Apparantly I have also failed to "apply the principles of cost of capital". How do I even respond to that...

"Shareholder: What is Berkshire’s cost of capital?
Buffett: That question puzzled people for thousands of years. So I’ll let Charlie handle it… Munger: I find the way that subject is taught at most business schools incoherent. I’m usually the one who asks that question and gets incoherent answers. I don’t have a good answer to what I consider a stupid question.
Buffett: We’re better at stupid answers to good questions."