E Split Corp ENSPF

Heads up

[Obscure1]

ENS is now trading at more than a 10% discount to the NAV.  Silly. 

I'm thinking about gettting a hazmat suit on and heading over to the cesspool also known as the ENB page of Stockhouse to shed a little insight.  IF, and it is a big IF the 500 or so ENB shareholders that follow that site anonymously because of the stench do pay actually ttention, ENS might see a little love. 

On another topic, Experienced mentioned the possibility of Middlefield buying back call options to offset sales of covered calls that they had made previously.  That was an intelligent observation made by a seasoned pro.

Under normal circumstances, I would agree with Experienced as the premium on the calls deteriorates over time which typically favours the seller of the calls.  However, depending upon the strike price of the calls and the premium received, Middlefield could be on the wrong side of the ledger if the share price has moved up more than Middlefield expected.    

This is where it gets a bit tricky as Middlefield won't want to take a hit on the deal when it can simply use the ATM available via a prospectus that has been previuously filed. In essence, Middlefield and  other fund managers that offer Splits can now play the game from both ends.  By that, I means that they can do a public offering if the Premium allows for a Raise without harming the NAV, or, they can sell calls to rake in premiums and if they get caught with their pants down (ie the share price moves up and the calls get exercised or the buyback via shares or purchasing new calls to flatten the position put Middlefield into a losing position on the trade, they can always resort to an ATM issue where we pay the cost of the freight bails out Middlefield) 

I have been wondering how the Split fund managers would find the next loophole when investors finally smartened up and stopped playing.  This might be the answer.  

So, how does this work out for the retail shareholders of ENS?  I don't know how much the retail investor ends up paying in fees for an ATM issue but you can rest assured it is us that is taking it on the chin.  I will be taking a look at the 2024 annual report for clues when it becomes available

[cttglvr]

Obscure!. Thank you!! You are the first one to give any merit to what I have been saying for a few months now...that Middlefield is using their ATM since they can't do overnight offerings with this kind of discount. I too will be looking for the second half 2024 financials to see if there is any substantial rise in the share count. As I said before I'm going to start lightening my

[Experienced]

Obscure...good ponts as usual Regarding the options, there are variations to this and what is not clear to me is what discretion Middlefield has in terms of its options trading.  There are certainly more complex options strategies than simply selling a call on a share of ENB.  As well, as you pointedt out, we don't even know what calls they may written and also the number of

[Ganyman61]

Hey Experienced very interesting thread but unfortunately for me I  don't trade options so I'm kind of scratching my head trying to decipher your point. Does it mean that we are stuck in this trading zone for eternity because Middlefield basically writes these options to suppress the the share price. Again sorry I'm not an option trader.

[Experienced]

Ganyman....guess I was a bit too technical in my post...my apologies Basically, it would seem, based on Obscure's analysis that Middlefield's approach to writing options while never enough to cover the difference between the money coming in from ENB dividends and what ENS pays out (the differntial was in and around 3%) but they were able to cover the difference through overnight offerings

[Ganyman61]

Excellent explanation! So I guess shareholders are stuck in the mud until Middlefield gets there act together. I hope the dividend is safe because the stock price isn't going anywhere. 

[Beuler]

All i hear is a couple of shorts spinning tall tales. 

[Obscure1]

Beuler:  If you think I would put all of this effort into educating others to drive down the share price, then I can't help ya.     I'm long ENS.  Very long.  Perhaps you will share your investment strategy and the reasons behind the moves you make so that we can learn from you.     

[Beuler]

Who talks down their own long position. 

[cttglvr]

Obscure has created excellent posts in the past detailing the fact that Middlefield does not take in enough income from Enbridge dividends to fully fund the distributions. I doubt they can make up the difference by just writing call options. One other item comes to mind that would put Middlefield in an even larger deficit position when it comes to paying distributions. Middlefield increased the