All signs point to a reverse merger between KADR and WAG, with WAG clearing out debt in return and KADR continuing to run the service segment virtually debt free. Stay tuned shortly!!
Porsche subsequently sold some of its VW shares to ease the tension in the market, but not before the episode upset the weightings in Germany’s benchmark DAX index and injured the country’s reputation as a financial center, in the estimation of many investors.
Volkswagen shares were up 12 percent on Tuesday, to close at 285 euros.
For Mr. Merckle, the damage was more concrete.
The last weeks of his life were spent wrangling with a consortium of banks for a bridge loan that would tide over his investment vehicle, VEM Vermögensverwaltung. It became increasingly clear that Mr. Merckle would have to sell part or all of Ratiopharm, widely regarded as his most attractive asset.
The situation cost speculators in New York and London dearly, leading to a fair amount of schadenfreude in Germany, where financial trickery is looked upon with much disdain. Among the known short-sellers were two large hedge funds, Glenview Capital and Greenlight Capital.
Germans were bewildered to discover that one of their own had also engaged in speculation, but their sympathy was not aroused.
best example of that i can give is Porsche and Volkswagen.
1. Porsche bankers accumulating shares under their name and buying options.
2 Shorts heavily shorting + naked shorting Volkswagen stock at the same time.
Porsche announces it has accumulated over 50% of Volkswagen stock....Volkswagen shares skyrocket to biggest ever increase in makret cap of any company listed on the news...one of richest Germans, a billionaire who was shorting commits suicide as a result
Published: January 6, 2009
FRANKFURT — Adolf Merckle, the German billionaire whose speculation in volatile Volkswagen stock had pushed his sprawling business empire to the edge of ruin, has committed suicide, his family said Tuesday.
Mr. Merckle, 74, was found dead on railroad tracks near his villa in the southern German hamlet of Blaubeuren on Monday evening. German authorities in the nearby city of Ulm confirmed the death and said there was no sign anyone else was involved.
“The distress to his firms caused by the financial crisis and the related uncertainties of recent weeks, along with the helplessness of no longer being able to handle the situation, broke the passionate family businessman, and he ended his life,” the family said in a statement.
The police said a suicide note had been found; its contents were not publicly released.
More than any other single investment, Mr. Merckle’s poorly timed bet on Volkswagen shares caused the financial distress that led to his death.
Last fall, Mr. Merckle lost hundreds of millions of euros when he was caught in a brief but ferocious speculative riptide linked to a campaign by Porsche, the sports car manufacturer, to seize control of Volkswagen. He was facing the dismantling of his empire and the sale of major holdings at the time of his death.
Porsche announced late Monday — around the time Mr. Merckle was taking his own life — that it had acquired slightly more than 50 percent of Volkswagen shares, up from a 42.6 percent voting stake in October. Porsche has said it planned to buy 75 percent of Volkswagen during the course of the year, as it seeks more operating control of Europe’s biggest carmaker.
A native of Dresden who made his way to Western Germany after World War II, Mr. Merckle parlayed a family business in chemicals into one of the biggest pharmaceutical concerns in the world. Ratiopharm, a maker of generic medicines that was a recognized brand itself, became the pride of the family.
Other businesses included Phoenix, a pharmaceutical wholesaler; and HeidelbergCement, a building materials supplier that in 2007 acquired a British rival, Hanson, to become a leading global player.
Forbes estimated Mr. Merckle’s fortune at $9.2 billion in 2008, making him No. 94 on its list of the world’s richest people.
The financial crisis began taking its toll on HeidelbergCement last year as the debt incurred to buy Hanson became more burdensome.
Standard & Poor’s lowered the company’s credit rating as liquidity became scarcer in global market turmoil.
In November, it became clear that Mr. Merckle had lost an amount of money in the “low hundreds of millions” by wagering that shares in Volkswagen would fall, a financial transaction known as short-selling.
The bet had put him up squarely against a celebrated family, the Porsches. The sports car manufacturer from nearby Stuttgart was in the process of taking over Volkswagen.
On Oct. 26, Porsche announced it had secured stock and options equivalent to about 75 percent of Volkswagen shares. Short-sellers, who borrow shares and sell them, hoping to buy them back later at a lower cost, were caught in a bind, since the revelation implied a shortage of VW shares to cover the short-selling.
Intense demand caused VW shares to skyrocket to just over 1,000 euros ($1,260), from 210 euros in two trading sessions. That briefly made the automaker the world’s most valuable company by market capitalization.
So here is a question Swiss....what about Medication Adhearance(WAG) accumulating shares prior to announcement because they are trying to buy back stock then? This would then allow them to have more leverage with the debt holders in a debt for equity swap because it would reduce the amount of shares. What do you think of that scenario? Also, can you imagine if that was the case and the longs who held on did not sell? Wow, that would be great if it happened that way.
here is a sample the other way public and private
EAST WINDSOR, N.J.--(BUSINESS WIRE)--Nov 23, 2009 - NexMed, Inc. (Nasdaq: NEXM), a developer of products based on the NexACT® technology, today announced that it has entered into a definitive agreement to acquire Bio-Quant, Inc., a revenue generating privately-held leading research organization for in vitro and in vivo contract drug discovery and pre-clinical development services, headquartered in San Diego, CA. Upon closing of the transaction, which is expected before the end of the year, Bio-Quant will become a wholly-owned subsidiary of NexMed. Bassam Damaj, Ph.D., co-founder, current Chief Executive Officer and Chief Scientific Officer of Bio-Quant, will become Chief Executive Officer of NexMed, replacing Vivian Liu, who will transition to the role of Executive Vice President and, in that capacity, Ms. Liu will continue to be responsible for leading the business development and licensing efforts for NexMed's clinical programs. Mark Westgate will remain as NexMed's Chief Financial Officer. The Board will be composed of three Bio-Quant nominees and four NexMed nominees, and Ms. Liu is expected to be appointed as Chairman of the Board.
The agreement provides for NexMed's issuance of 4,000,000 unregistered shares of its common stock to the Bio-Quant shareholders and a promissory note (the “Note”) in the amount of approximately $12.1 million due on December 31, 2010. NexMed can elect to pay all or any portion of the Note by issuing its common stock. Such repayment in common stock is contingent upon NexMed shareholder approval. As a condition to closing, there will be a Bio-Quant shareholders meeting. Certain key shareholders of Bio-Quant have agreed to vote in favor of the transaction.
Commenting on today's news, Ms. Liu stated, “We look forward to welcoming the Bio-Quant team as a NexMed subsidiary. Through this transaction, NexMed acquires a revenue generating, cash flow positive business which has grown over 250% in the past five years and is continuing to grow at present. Moreover, we will gain preclinical capabilities, add valuable licensing expertise and be able to leverage Bio-Quant's existing relationships with key pharmaceutical companies – all of which will aid in the continued development and the ultimate commercialization of our products under development.”
Dr. Damaj, noted, “We are delighted to become part of NexMed, a company with a novel technology and innovative products which we believe can be better monetized and generate value for our shareholders. While continuing our normal course of business as a leading CRO, we will be adding Our established and growing business, resources, and expertise to NexMed, which should allow NexMed to continue its business development in a more rapid and efficient manner.”
Mark Westgate added, “The acquisition of Bio-Quant was an integral part of our compliance plan presented to the NASDAQ Listing Qualification Panel (the “Panel”) on Thursday, November 12, 2009. We are hopeful that the signing of this agreement will give the Panel further confidence that we will regain and maintain compliance with all applicable continued listing requirements. While we have yet to receive a decision from the Panel, we are optimistic that the Panel will continue our listing pending the implementation of our plan.”
FTN Equity Capital Markets Corp., in New York City, has served as NexMed's financial advisor in the structuring and negotiations of this transaction.
I think the better observation is future growth and sustainability. If the prospects for the stock to achieve new highs and re-instiute itself with a great relationship like a possible Walgreens/arcadia rollout, thats all that matters in my mind. All in all a relationship with the big boys will mean more footing in a growing and lucrative industry.
i was involved in one more recently in 2009/2010.company was called nexmed(nexm),did a reverse merger with private apricus bio which is now public(apri).it went from $0.19 to $0.84 in a day or two if i recall correctly on the news.
I think you are right Justin. I also believe insiders from the private company would become majority holders of the new conversion. I agree with Swiss, i think a debt swap with a equity buy in is what is in play here.