Young analyst draws Wall Street ire taking on Kinder Morgan

Mon Sep 9, 2013 2:44pm EDT
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By Anna Driver

HOUSTON (Reuters) - Kevin Kaiser, a 26-year-old analyst only three years into his first job out of the Ivy League, jolted Wall Street last week with a pithy email taking aim at North America's largest oil and gas pipeline and processing company - Kinder Morgan.

The email, sent to clients of independent research firm Hedgeye Risk Management, said Kinder Morgan and its associated companies "is a house of cards, completely misunderstood and mispriced."

No specifics were provided, but the missive and his comments on Twitter spooked investors who shaved $4 billion off the company's market capitalization and sent Kinder Morgan Inc (KMI.N: Quote) shares down 6 percent last Wednesday.

Analysts are not certain why Kaiser's comments resonated with so many investors, but they underscore the growing influence of social media like Twitter, which can deliver investment information - accurate or not - to thousands in seconds at the push of a button.

Some compared the market to a circus. "Here is your PT Barnum people," one user tweeted as Kaiser caused a firestorm on Twitter and prompted people to question his experience.

"It seems a little surprising that enough people would be spooked by unsupported assertions," said Jason Stevens, an analyst at Morningstar.

The email titled "New Best Idea: Short Kinder Morgan," was a teaser for a report to be issued on Tuesday. No analysis was provided: only seven bullet points with topics that the report will address, including the valuation of the company's sprawling oil and gas business, which has surged as exploration companies tap into shale deposits driving a U.S. energy boom.

Kaiser declined to comment on the email. Kinder Morgan did not comment. But Rich Kinder, the billionaire former Enron executive who is chairman of Kinder Morgan, bought opportunistically on the dip.   Continued...