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TheStreet Open House

Shorts Battle Over Linn

All of this valuation conflict for Linn is on the back drop of the Berry Petroleum (BRY) acquisition, still to be approved by Berry shareholders.

Now here is where the trading psyche works to make the Linn shares a better "bear raid" opportunity. Linn uses subsidiary Linnco (LNCO) shares as capital for purchasing Berry, but negative news makes that acquisition less appetizing for Berry shareholders, making the acquisition less likely and forcing down Linn shares even further. Helping to dissuade Berry shareholders into approving the Linn deal is the smartest trading move for funds that are short Linn shares.

It's a negative trading circle for Linn right now, and the fact that the shorting research firm has found CNBC host Jim Cramer and his Action Alerts trust fund long Linn shares and supporting the company has made the bear activity that much more powerful. Besides three recent negative pieces from Barron's, the research firm conducted a conference call Tuesday, once again laying out their bear case. You'd think Barron's had given their minority view on Linn enough exposure already, but responding to Jim and his overwhelming media presence is another great opportunity to panic the retail shareholder and force prices again lower today -- in an up market.

Much of the outcome for Linn might depend on whether the "raid" is successful and the Berry deal closes. But the ultimate value of the shares and whether they're worth buying is now less about the financials and fundamentals, and more about the media war that's being engaged.

And that's the toughest variable for any trader to value.

At the time of publication, Dicker had no positions in securities mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

At the time of publication, Dicker had no positions in stocks mentioned, although positions may change at any time.

Dan Dicker has been a floor trader at the New York Mercantile Exchange with more than 25 years of oil trading experience. He is a licensed commodities trade adviser.

Dan is currently President of MercBloc LLC, a wealth management firm and is the author of "Oil's Endless Bid," published in March of 2011 by John Wiley and Sons.

Dan Dicker has appeared as an energy analyst since 2002 with all the major financial news networks. He has lent his expertise in hundreds of live radio and television broadcasts on CNBC, Bloomberg US and UK and CNNfn.

Dan obtained a bachelor of arts degree from the State University of New York at Stony Brook in 1982.

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