Young analyst's email spooked market, wiped $4bn of company's market cap

Email Simon Stratford

The power of one.

Reuters reports that 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 $4bn off the company's market capitalization and sent Kinder Morgan shares down 6% 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.

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.

According to Reuters, Wall Street sell-side analysts rushed to the company's defense, issuing notes and articles that took aim at Kaiser's credibility. The steep decline in Kinder Morgan shares is a buying opportunity, they argued.

Rich Kinder, the billionaire former Enron executive who is chairman of Kinder Morgan, bought opportunistically on the dip.

Hit the link below to access the complete Reuters article:

Young analyst draws Wall Street ire taking on Kinder Morgan

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