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Bristol-Myers Squibb Company Message Board

  • Cougar3 Cougar3 Apr 4, 2002 12:19 AM Flag

    BMY Meltdown

    Must admit I am stunned by the extent of the earnings shortfall announced just after the close of the regular market today. It almost seems that BMY has decided to forecast as low an earnings number as possible to try and set-up as easy a comparison for 2003 as possible and to insure they don't have to re-warn for the balance of 2002. The big question now is will they still be an independent company come 2003?

    My hats off to DNase44 and many others for being dead on target to the company's problems while I continued to back and believe in the "company line" hook, line and sinker. With today's huge earnings shortfall warning, my name can be added to the long list of proponents for the removal/replacement of Mr. Peter Dolan. Hey, even the Irishman was finally right about BMY.

    I don't think that BMY can or will make it to 2003 as an independent company. I have posted many times that I felt BMY's independence was predicated on Vanlev becoming a blockbuster. Since we have recently learned that it will not, plus the fallout to come from the drastic earnings shortfall- I don't see BMY being in any position to fend off a hostile merger.

    For those of you who seem to revel in hoping that my financial affairs are in perilous shape, I am sorry to disappoint. While BMY is by far my largest single position, my other 40+ stock holdings plus investments in US Treasuries, tax-free bonds, and tax-free money market funds are more than ample to provide for all my possilble wants and needs as well those of my wife for the rest of our lifetimes. Irishman, I as sorry to report that I will not be seeking a position as "grillmaster" at the Waffle House alongside you.

    BMY is now saying that 2002 earnings will be about $1.30 for 2002 (also counting .40 cents for max. inventory charges). I can see how one could project a stock price of around $20 for BMY based on these EPS for 2002. However, I would also be more stunned than I was late today to ever see BMY sell at that level. At $20, BMY would have a market cap of only $40 billion and there would be more than a dozen major pharmas capable of making either a friendly or hostile takeover using their higher priced stock as cheap currency. While I haven't done the calculations, I believe it would be non-dilutive to an acquirer of BMY even if they offered a substantial premium of 75%.

    As for me, I will continue to hold ALL my shares until the company "turns around" or is taken out via a friendly or hostile merger. While today was not a good day, it was a piece of cake compared to watching my wife battle breast cancer a couple years ago or see 70% of my fellow OCS Infantry Officers in my Company return from Vietnam in body bags.

    To my fellow BMY longs, I suggest you strap on your steel helmet and get out your entrenching tool and dig in. Even using $1.30 in earnings for 2002, BMY will earn more than 2 1/2 billion in net profits. More in profits than most companies generate in sales. Given time, BMY will turn around this situation. Absent that, you may find yourself an owner of another major pharma stock which has been "minding the store" and taking care of business.

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