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  • robbsbeach robbsbeach Jul 23, 2011 12:16 AM Flag

    someone got slapped!

    I wonder how fast Wag is burning thru that $2B announced buyback with the most recent event.
    Yank your Up to Bat..

    Could the number be higher than 20% of revenue loss?
    CVS/CareMark must be licking their lips
    with Walmart being a co-host for this cenntenial Dinner. Sushi anyone!!
    This possible revenue loss is beyond a Slap, A class action more likely..

    So what do you think the outcome in the Walgreens/ESRX conflict will be..
    CMxgen I give you a home run.

    Adam Fein where are you???, because a few of our own investors in this Sector saw this future direction ..
    Check Mate..

    Regards,

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    • Could the Rx revenue loss exceed 20%? Well, the numbers from Adam Fein who you reference which I posted awhile back... deleted, of course (truth apparently violates the T-O-S)... showed combined Rx share for ESRX and MHS right at 40%. I would thus estimate they are about 40% of WAG's total, as well.

      I, for one, disagree with the several posters on multiple boards that believe ESRX will mend fences with Walgreens. If you read Wade Miquelon's commentary from the Jefferies conference in late June... there was a classic bridge burning, one that I question ever can be repaired unless WAG wants to roll in the gutter and pay fealty to Paz for insulting, degrading comments made in that internet broadcast. IMHO.

      I actually sense WAG's future is even more uncertain with Unitedhealthcare as they commence internalizing their PBM business.

      Then there's Walmart Express just 'round the corner...

      I am actually looking at RAD as the possible big winner in this standoff. Might actually save them as WAG strategically falters, yet again.

      During several, earlier reimbursement showdowns which WAG survived (Delaware, Washington State) I predicted (messages deleted again, of course) that someone would eventually call their bluff. CVS came close to doing so. IT'S TIME!

      Yank

      • 1 Reply to big.yank
      • big.Yank and CMXgen:

        You both have a excellent eye for this sectors Rips and Dips.
        Big.Yank I read the June Transcript, and the Faux Pas made by Walgreens CFO, it could even be called a Huburis veiw and losing touch with business norms.

        I also read in a M&A announcement that ESRX placed a early morning call to Wag, Cmxgen made a referrence to it in another post.
        Perhaps the original Terms in ESRX/WAG contract dispute are now off the table.
        It seems from the M&A article that ESRX would still be willing to business with Walgreens, but on new terms (my Speculation)...

        The closing of the ESRX/Medco merger is not to occur until 2012 with CSGN/C and JPM/Laz as investment bankers.
        The legal counsels are well vetted in this type of Merger arrangement.
        Is it time to call my banker??

        Cmxgen IMHO is spot on about Walgreens rolling over for a contractual agreement and gross margin loss.
        The only play wag has is the food desert
        sushi-beauty.com bar to sell to Wall Street after this is settled.
        It will be interesting to see what the sharks, CVS-Walmart-Target and Food stores will offer up to ESRX/MEDCO.

        Alan Rochstein CFA with his long Wag position.. thinks this Merger will go through.
        More on this Later..

    • Dice up ESRX-WAG contract:

      Brand contract price will be fairly stable, its all about generics.....
      90 day brand fills will be very low margin.

      Generic reimbursement cost will be cut by I guesstimate at least 10% from current levels...
      so if total ESRX and MHS business is 14% of total revenue, .7 of 14% to amount for Brand Sales....well you know where I am going with the math, you can guestimate how much gross margin loss we are looking it......... WAG will not walk away from ESRX/MHS, they will end up lower margins, and will consolidate stores....its coming!

 
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