By Introduction
In a surprising move, CEO Pierce Norton II of Oneok, the pipeline operator, recently purchased a significant number of shares amidst a downward trend in the company’s stock. While concerns surrounding Oneok’s proposed acquisition of Magellan Midstream Partners have caused investor uncertainty, Norton’s bold purchase suggests his unwavering belief in the company’s potential.
Investor Concerns
Investor sentiment towards Oneok has significantly deteriorated due to uncertainties surrounding the proposed acquisition. The once-promising deal now faces considerable opposition, dimming investor confidence. Furthermore, the declining share price of Oneok (OKE) has diminished the overall value of the transaction, with each Magellan unit now valued at $25 in cash and 0.667 in Oneok stock. Rumors even suggest that Warren Buffett’s Berkshire Hathaway (BRK.B), a prominent player in the pipeline industry, may enter the fray with a competing bid for Magellan.
CEO’s Show of Confidence
Undeterred by the challenges, CEO Pierce Norton II demonstrated his confidence in Oneok by personally acquiring a substantial number of company shares. On June 29, Norton invested a formidable $1.5 million to purchase 24,607 Oneok shares, translating to an average price of $60.96 per share. As per official records filed with the Securities and Exchange Commission, Norton’s stake in the company now amounts to an impressive 42,017 shares.
With Norton’s assertive move to acquire additional shares amidst market uncertainty, it remains to be seen how this bold endeavor will shape Oneok’s future. Regardless, such resolute actions by the CEO highlight his unwavering commitment to the success of Oneok amidst challenging times.
Norton’s Silence on Oneok Deal
Oneok, a leading energy company, has not provided any response to a request seeking comments from Norton, a prominent figure in the industry. Norton’s last purchase of Oneok shares happened in June 2022, when he invested approximately $500,000 for 8,975 shares. The average price per share was $55.54.
Opposition from Energy Income Partners
In early June, Energy Income Partners expressed its strong opposition to the Oneok deal. As one of the largest unitholders of Magellan, Energy Income Partners firmly believed that the taxes incurred by their funds and investors would exceed any potential benefits resulting from the merger. In a letter addressed to Magellan, they emphasized their desire for Magellan to retain its status as an independent entity. Energy Income Partners celebrated the exceptional returns on invested capital delivered by Magellan, which they deemed superior to Oneok’s performance.
# Inside Scoop
Inside Scoop is a regular feature that delves into the stock transactions of corporate executives, board members, large shareholders, politicians, and other prominent figures. These individuals, often referred to as insiders, are mandated by regulatory bodies such as the Securities and Exchange Commission to disclose their stock trades. This provides a valuable insight into the activities of influential investors.
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