Tracey, Let me clarify, as well as amplify, my beliefs regarding my previous post: 1) WebMD has made a large Capital Investment in 2015, which points to the possibility of an alternate revenue stream next year.
2) I believe this will be up and running within the next 6 months. 2) All is quiet now, as Marty is not one to show his cards to the competition until his horse is well out of the gate.3) WebMD's debt to cash ratio will be much more favorable by the end of the 1st qtr. 2016 4) Walgreens strategic alliance with WebMD points to the importance of WebMD to Stefano Pessina's plans for capitalizing on the healthcare industry opportunities.4) Marty is not looking for a buyer or a merger, as he has yet to accomplish his strategic objective of improving healthcare outcomes at lower costs, and delivering tons of cash, as a result. 5) Share price is a reflection of revenue and profit growth, and currently, over the next 6 months, we will not see a growth rate that will get us to the convert price of $71.84, hence the payback of the $252 million in debt. 6) I believe we will get more clarity by the 4th qtr. earnings call, next February, however, it could be sooner if the new platform is up and running, and delivering revenue by year end 2015.
steve ,for a few days ive been contemplating the idea that we have mgt really working to an extent against shareholders judging by the way the stock price has acted and the continual dis interest in the stock as viewd from volume,i think i agree with your opinion mgt really is holding the price down waiting for a merger or a buyout,in that light ive been trying to determine if waiting for this event is worth it and conceptualy what would be worth waiting for,its hard for me as ive been with marty since the 80s.for this to wait another 18 mos ,keeping in mind that a standard buyout is typicly about 15 to 25 percent,when i plug in the 18 mos i believe the stock gets aniother 10 percent,which if i take the 25 percent prem gets us to thats 72 dollars you reference above,nice if true,but im having a hard time getting to believe how this plays out.im frustrated with this
WebMD previously provided the following guidance for 2nd qtr.: Revenue: $145m-$148m Adjusted EBITDA: $38m-$39.5m Net Income: $8.5m-$9.5m. It is reasonable to predict that they will report somewhere within this forecasted range. I do not believe that they will change the full year forecast, so I also do not anticipate any significant movement in share price. I continue to believe that Wygod will keep a lid on any future revenue generating platforms over the next 6 months.
One important Balance Sheet adjustment will take place on March 31st 2016, and that is when the 2.25% convertible note comes due. The balance due on this note is $252 million, and the conversion price is $71.84.
Assuming the stock will not be trading anywhere near the conversion price, it is reasonable to assume repayment. This may have something to do with the lack of any aggressive stock buy backs, as the float will not increase by the 3.5 million shares from the 2.25% note. However, we may see the conversion of the 1.5% note by March 31st 2016 as the convert price is $52.69, representing the addition to current float of 5.7 million shares.
The Balance Sheet impact from these 2 notes will be the reduction of debt from its current level of $952 million to $400 million. My assumption for Cash on Hand after debt adjustment, will be approximately $550 million. I believe we may have to wait until WebMD reports 4th qtr. earnings next February or March 2016 before getting anything meaningful relative to future growth prospects.
What is most revealing about the first statement, is the identification of a broad based strategy for WebMD.
The execution of this strategy began with providing consumers relevant information for achieving better health outcomes. What's next is yet to be revealed! Given the complexity of our healthcare system, it is no wonder that developing a new healthcare paradigm which alters a long standing patient / provider / payer system, that reduces costs, while simultaneously improving patient outcomes is a monumental task!
So given Wygod's strategic alliance with Pessina / Walgreens plus other plans still unannounced I feel confident that when implemented, WebMD will make tons of money and a surging stock price will follow.
So we just need to be patient and wait for Marty to deliver his strategic plans!
In the WSJ article mentioned by rsrcej, there are two statements that say a lot about Marty's attitude and where we are going:
"We'll improve patient outcomes and bring down the expense of health care," he says, and "as a byproduct, the company will make a ton of money."
"I'm not interested in revenue that's not strategic -- in revenue for the sake of revenue that doesn't eventually translate into profits," Mr. Wygod says.
You have definitely confirmed everything the limpingbull has posted about Marty Wygod! When ones description of an executives mission is seconded by another, with history, knowledge and experience, it provides a degree of certainty that this investment in WebMD / Wygod will eventually pay out in the future.
Your contribution to this board is welcomed by many long term investors in WebMD ! Thanks again!
thank you limpingbull and I apologize for not mentioning you along with stevecrf in my message. You definitely have had some very interesting messages that have caught my attention. Thank you again, and thank you stevecrf. I just wish us all, all the luck in the world with WBMD. I am a pharmacist who worked for many years for medco. I was there in 1983 when Wygod bought the company from APL ( Posner). I witnessed how Wygod and his group transformed the company. The few things I did learn about him was that he was all business and you had to be tough to work for him. I stay married to him and WBMD for 3 reasons : He has had a very successful tract record in business, has made me alot of money in the past ( the only time I have made alot of money, I am a pretty bad investor overall) and lastly he is trying to make our very complex, almost out of control healthcare system alot better with better cost containment, better efficiencies and a more knowledgeable better informed consumer over their health issues. I just have to continue to stay with this company and Wygod, hope our healthcare system improves for all of us because of a company like WBMD and i truly hope our faith in this company`s leadership will reward us one day.
I must admit that I have benefited from the knowledge that the limpingbull has shared on this board relative to a very informed understanding of how Marty Wygod thinks and operates. He has certainly kept me on point.
Welcome to the WebMD Message Board, we all long forward to hearing your commentary as the future of WebMD unfolds! Also, tracey563 is another well informed contributor, and a long term holder of WebMD.
I really appreciate some of the comments put out on this message board, especially yours stevecrf. Wall St Journal article 1/17/2001 about Wygod taking the helm of a floundering WBMD : Wygod: " This is the biggest challenge I`ve faced," Mr. Wygod says. But, he adds, "it`s also by far the biggest opportunity." 15 yrs later and Marty at 75 is still in charge with his vision I believe still in tact. It has definitely NOT been a smooth run & I personally have guessed wrong a few times on when he was going to sell wbmd. Many have said " don`t stay married to one stock" but i have, and continue to stay married with so much past pain and dissappointment. In that same Wall St Journal article Wygod states: "We'll improve patient outcomes and bring down the expense of health care, and as a byproduct, the company will make a ton of money." I understand the frustration of the way the stock price has gyrated (manipulated?) over the years. I at times worried if Wygod was losing his touch, if his passion was truly more on the horses than WBMD. Is he as sharp as he use to be now at 75 ? The answer did come to me about how serious Wygod is about WBMD and it`s future when he gave the poison pill to WBMD when Icahn tried to get serious control of the company. Icahn eventually had to give up on his quest at around $35.00. I never did believe those reports about Wygod trying to sell the company as the price collapsed. This type of business (online health) has taken so long to adopt and accept from so many parties and this was not unexpected. I do believe things are now going to start moving forward more dramatically for WBMD in the next 6 to 9 months. This Walgreens/Boots thing sounds interesting and i earlier started believing in a possible buyout by the end of the year. But as I think more and more about it, I am starting to believe WBMD is not thinking buyout, they are looking for MORE key, strategic partnerships that need WBMD services that will dramatically increase revenue flow
the stock is not participating today up a penny now,it doesnt mean anything ,in fact unless earnings surprise neg its likely not gonna make a differencuntil marty wants it up its not going upe,
This is acting nicely as of late....even when others are being battered by the summer doldrums...web keeps bouncing back and holding strong.....I was a little worried at one point like tracey...but seems good now ?
And the list of executives working well into their eighties continues to grow!
Now, if this business relationship between WebMD / Wygod and Walgreens / Pessina can grow our stock price to triple digits, I will be one very happy shareholder.
I'm not sure about that. After all, Marty is only a bit older than Stefano. And at 75, I don't think he even considers retirement.
Look at Warren Buffett. He is 84. These guys just go on and on because that is their life.
They wouldn't know what to do without their jobs.
Limp, I think you may be spot on relative to the dynamics of, and between, both Marty and Stefano. And as a result of their super ego similarities, isn't it possible, that at some time in the future after building this successful partnership, Marty may be comfortable selling to Stefano, as he sees a younger version of himself. Some how I believe that this would be the end game for Marty as he trusts that Stefano will not miss a beat and will have tremendous leverage as a result of the size and scope of Walgreens Boots Alliance as an International Powerhouse of Healthcare.
Steve, My opinion is based on the psychology of the individual, as P.G.Wodehouse's Jeeves would have said.
Both guys are having sky high egos and would never play second fiddle to anybody.
Stefano made an enormous amount of money with M&A and is an expert on the international side of health care.
Marty is, in my opinion, THE expert on the american side.
As partners they can profit from each other's knowledge without getting into a private fight and each can concentrate on the stuff he knows best.
The result could be mind boggeling.
Interesting activity today on WBMD July $45 calls, especially since these expire next Friday. It's probably nothing. But I don't think this company stays as a standalone much longer.
Either way, I think the next 6 months will be very interesting! And whatever Pessina has planned for Walgreens should hopefully impact WebMD favorably as a result of their partnership.
He might be interested, but he won't get it.
He is a sort of Marty guy,and I think the two are much better off as partners.
I posted this because we are in a partnership with him and his company, and therefore we should keep an eye on him.