After the market closed on Monday, Linn Energy (NSDQ: LINE) announced plans to issue 12 million units (shares) as part of a secondary offering, plus an additional 1.8 million over-allotment option to cover additional demand.

Yesterday, Linn announced that it has priced a 15 million unit offering at $25 per share, 3 million units more than it had originally intended to sell. In addition, Linn has increased the over-allotment option to 2.25 million units. If, as we expect, the market absorbs the full issue, Linn will receive $414 million after all fees are paid related to the sale.

As we noted in Monday evening’s Flash Alert, the initial knee-jerk reaction to an offering of new units is a dip in the shares; true to form, Linn’s stock dropped in Tuesday’s session. Expectations for an up-sized offering may have been what pushed Linn’s stock lower in the afternoon, to close at $25 per share.

But the real implication of the offering is bullish. Linn’s up-sized offering demonstrates the strength of the equity market; the publicly traded partnership is taking advantage of the opportunity to raise inexpensive capital. Management will likely use this capital acquire of oil and gas properties.

Although the $25 offering price is below the stock’s recent highs, it’s normal for secondary offerings to be priced slightly below market to encourage demand. And consider that over the past year, Linn’s units have traded at less than $25 per unit on 75 percent of trading days. By any relevant measure, Linn is getting a good deal.

Several master limited partnerships (MLP) and limited liability companies (LLC) have issued secondary offerings in recent months. A few have up-sized their originally planned offerings. Such events are a sign of strength at this stage, not weakness; the MLPs are using the capital to fund growth.  On each occasion, it’s proved an outstanding buying opportunity–and Linn’s latest secondary offering is no exception. Buy Linn Energy under 28.