Amiable stock market guru Jim Cramer seems to change his mind faster than I can keep up with the news flow. Just the other day I was about to quote him in an article about embattled LINN Energy (LINEQ) only to find out that he'd already changed his mind on the matter. While I understand his logic, that doesn't mean I agree with it.

Has the sun finally set on LINN Energy? (Source: LINN Energy.)

The quick one-eighty on the company came after LINN's voluntary disclosure that the SEC is investigating its accounting procedures. Those procedures have been in the spotlight all year, after short-sellers called them aggressive and overstated. What surprises me is that Cramer is throwing in the towel now when it's really only logical that the SEC should look into the situation, given how aggressive these short-sellers have been in attacking the company.

In changing his mind, Cramer said:

I had liked the company, but they're under the microscope for accounting irregularities. ... And whenever a company is scrutinized for issues such as these, I sell. Even though the stock is cheap and I otherwise still like it, I practice discipline and sell.

While I can understand having a discipline like that, you're talking about a company that's being aggressively attacked by short-sellers in a way that just seems a bit over the top. 

Not only that, but this isn't a company that's going to zero because the SEC discovers it's a mirage. The company has real assets to back its business. LINN has amassed more than 3 trillion cubic feet equivalent of proved developed reserves, another 2 billion cubic feet equivalent of proved undeveloped reserves, and its hedge book, a gas plant, and other facilities to boot. That's $10 billion in real tangible value, and it doesn't count the 14 trillion cubic feet of unproved drilling inventory, estimated to be worth between $6.5 billion and $11.2 billion. That equates to a net asset value that's conservatively worth $37.34 per unit and potentially worth up to $65 per unit.

I'm not saying that SEC investigations are something to ignore. However, high-profile short-sellers have a way of dropping a stock down by bringing in the SEC. Take the case of Green Mountain Coffee Roasters (GMCR.DL). Famed short seller David Einhorn put together a 110-slide PowerPoint presentation on the company's accounting issues. That would seem to be what prompted an SEC investigation, which caused its stock to really take a dive. Despite the attacks and that additional scrutiny, over the past two years the company has continued to sell coffee. All the while its stock has steadily recovered.

Another even more recent example is the high-profile short-sale argument against Herbalife (HLF 2.91%) This case also drew in the SEC as another famed short-seller had called the company "the best-managed pyramid scheme in the history of the world." Because many investors have rules to sell when the SEC is involved, it creates a lot of selling pressure as investors bail, which can make a lot of money for a short-seller.

None of this is to say that these short-sellers don't have any valid arguments, but there does appear to be some gamesmanship going on. Knowing full well that at some point the SEC has to look into these accusations, it's bound to drop the stock price when investors run for the hills once an inquiry is disclosed. Investors in both LINN Energy and its affiliate LinnCo (NASDAQ: LNCO) are unfortunately learning that lesson this week.

Smelling blood in the water, these same short-sellers can continue to pick off similar targets. That's why I'd go out on a limb here and say that it wouldn't surprise to see the SEC launch an inquiry on Breitburn Energy Partners (BBEPQ). It seemed that as soon as news hit that the SEC was looking into LINN, the same short-sellers that had targeted it then dubbed Breitburn as "LINN Energy Junior." Here again the accusations are scathing, as the company's distribution is being called "largely a mirage," which makes its units worth single digits. This has knocked the stock down over the past week, and the volatility isn't likely to abate anytime soon.

That's why I really don't understand Cramer's call on LINN. He knows the Street's "game" better than anyone else. He should know that these pubic accusations are going to catch the eye of the SEC. That's why I don't agree with his advice to simply sell because of some rule. There is real tangible value in LINN Energy, and while it's quite possible that the SEC might find something it doesn't like, it won't find a mirage.