I was going to write something about where I thought Kinder screwed up and perhaps where I did.  Dan Dicker sums it well enough in the Street’s  Real Money.  He writes,

“What is so interesting about today’s 8% gain in share price is that it comes on the heels of an announcement from the company of a 75% dividend cut — normally the harbinger of an even further slide in shares.

The reason for the rally today in light of the dividend cut is obvious — much of the tremendous pressure on KMI shares in the last week was caused by a concerted bear run on the stock from hedge funds looking to drive prices lower. Today, as they all thought they’d get their ultimate victory and big payoff on the final capitulation of income investors, they were instead met with a lack of sellers, forcing them to cover and amazingly driving prices much higher.

Personally, I am using this short-covering rally to exit my positions and cut my losses. With a $21 entry point and second tier of buying at $17.50 and a last small purchase near $15, the total losses are not insignificant, but very manageable. I couldn’t think about staying with the trade now.

I don’t even know what Kinder Morgan is anymore.

By cutting so deeply into the dividend, Kinder is completely abandoning the MLP-type structure of accessing the capital and debt markets to fuel growth. On the plus side, Kinder has certainly ended any thought of a downgrade for its bonds to junk status, and opened up plenty of cash to fuel expansion, but with a 3% dividend, it has moved from being an income producer to a utility-type growth stock.

Who wants a leveraged 3% utility? Not me.”