Linn Energy LLC (NASDAQ:LINE) Extremely Vulnerable To Oil Fluctuations

[[tagnumber 0]][[tagnumber 1]]The oil industry has recently been under careful scrutiny in investorland and the reason is clear and simple: almost any industry–related business is influenced by the fluctuations in the price of oil. Linn Energy LLC (NASDAQ:LINE) makes no exception a quick glance at its chart performance for the last 12 months proves just that.[[tagnumber 2]] [[tagnumber 0]]It was earlier this week that the price of crude hit a six–and–a–half low. It was yesterday that LINE slid further down to $2.11 per share. Compared with its 52–week high of $31.80 per share, this makes for an astonishing 93% depreciation in just under twelve months.[[tagnumber 2]] [[tagnumber 0]][[tagnumber 6]]While dwindling oil prices have adversely impacted the stock price of LINE, there are some other factors that have contributed thereto. The company is simply losing quite a lot of money and has been doing so for the last four quarters on record. The most recent 10–Q report for the second quarter of 2015 was particularly bad as Linn barely managed to generate half of its Q2 2014 revenues and scored a mammoth net loss of $379 million. These numbers explain why LINE’s management decided to suspend its dividend distribution as of October 2015, which in turn had a devastating impact on the company’s price per share.[[tagnumber 2]] [[tagnumber 0]]In short, LINE is suffering on the charts not only because of low oil sales, but also due to its less–than–stellar financials. And there is little to suggest that the latter will improve any time soon. Nevertheless, LINE shares are up 37% today following a minor 10% resurgence in oil prices.[[tagnumber 2]] [[tagnumber 0]]Whether this will mark the beginning of the end for oil’s heavy downward trend is still fairly early to say. What seems clearer, however, is that a huge rally in LINE shares fueled solely by increasing oil prices could only work in the immediate term. To ensure long–term growth, management will need to turn the business profitable. Considering that the former CFO has left the company in pursuit of other opportunities, the new one will have to rise to the occasion.[[tagnumber 2]]