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Novadaq Technologies Inc. Message Board

  • e11ndofwar e11ndofwar Dec 13, 2013 9:44 AM Flag

    andersongordon and Fish OT

    When you have a moment, would appreciate your thoughts on Cardica.
    regards endo

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    • andersongordon@ymail.com andersongordon Dec 13, 2013 10:08 AM Flag

      I've been posting on the CRDC message board.
      Summary:
      There is a concerted effort by Applied to push down the price per share...two, in succession announcements to sell 500K of their shares (~3.6 million original holdings) since the submission of the stapler-cutter 510k. Why?

      If they are doing this for non-economic reasons (vendetta for Dr Hausen rejecting a low ball buyout offer?) that is possible but not likely. If they need cash the 1M shares at ~$1.10 @ seems unlikely, but when combined with tax loss of ~$2 @ that could add another ~$0.40 @ assuming 20% capital gains tax rate. Still this wouldn't move the needle for any normal institutional investor. Most likely they are trying some sort of squeeze play (my thoughts only---no actual evidence or information). If they can keep them from raising cash when they most need it (to finish the development and regulatory approval) for a potential block buster instrument, as well as limiting their ability to hire marketing staff and infrastructure needed to roll out in the US, they might force CRDC to a sweetheart deal and scoop up the company for pennies on the dollar of value. I don't think they could win in a head to head bidding war with Covidian or JNJ so this may be their best option. What are the downsides if they lose? They give up 1M shares at ~$1.10 and if CRDC succeeds and the price goes to ~$10 in 5 years, they still have 2.6M shares and forego ~$9 million gain. If they win and take the stapler-cutter in their winnings they gain a dominant entrant in the 3-4 $ Billion sealing/cutting market. At 10% net margins that could be worth over a couple billion in present value dollars. Would someone bet 0.009 to get 2.000? Some may.

      Other investors will be hurt by the process. I wouldn't do it but some would.

      GSA

 
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