Making amends for their ego and Greed. They overpaid 200% for their acquistions goaded by Wall St. who stroked their egos as the Miracle boys of India.
Now they and their shareholders are paying the price. The plants are worthless due to the intrinsic clean up cost which are not accounted for. Gaap accounting does not price in future clean up cost which all Govts now impose at time of sale/liquidation.Steel is a dirty commodity.
In brief this now a penny stock for day traders who want to make ten cents.
MT faces a huge clean up Bill at each of it Plants it would like to close.
They have over the years played footsie with local Govt to avoid closing plants which will put their workers on welfare.In return the Govts have not enforced any clean technology resolutions or fines.
With the world glut in Steel (35%) overcapcity, prices will not recover till after 2025 at the earliest. MT cannot survive till then.
REmodulin sales have leveled off and can only spike up if they can get Medtronis pump approval by end Oct.
Meanwhile sales will be flat and that's why PVT Hedge Funds are short.
Pvt Hedge Funds are still short even though LCI made anew low. My FA says that happens when they have the inside track.
The volume indicator must show a double if there is a meaningful return from a low.
Not quite. The plaintiff cost has to be borne by the defendant and Merck's Attorney will demand every cent.
True; check out the local bar where they have their quarterly lunch sessions after their quarterly meetings with Analysts.
The EV calc is based on assuming that the Goodwill LCI paid is bonafide and justifiable. The street believes this is not the case.The bought out Co. had its own EV and cash flow prior take over and they were very much lower than what it is now.
I do not know wahat the discounted acceptable value is.
No not quite.
Look at LCI before the acquisition. It had little debt ,, a good product portfolio and had a great price. It then made a paid by debt acquisition of a Co. with little cash flow. The street feels it overpaid. The result is that the NAV is now _-ve with no official sign when it will become +ve. The Investment world feels it overpaid The slide represents that overpayment as estimated by the street,
I still think LCI will rise from the ashes but I suspect there will be more pain in the days to come.
Good luck nevertheless.
in India, nepotism is still rampant. Big capital Loans are given to Big Buisness Cos. thru Govt. sponsors and these Cos routinely aim to default return of capital. IBN senior Mgm.t have been in bed with senior Govt. officials lured by national awards for service to the Nation.All this Capital Loss is from your earnings. Lending to small firms involve far more work and research. They are generally less prone to default.
The CEO and her Cronies deserve to be turfed out and replaced by a new CEO & set of experienced Loan Officers who specialize in Risk control mgmt. By lending to smaller firms they automatically reduce such losses which affects the Capital Account,
lonbut: You have it right. Interest rates are expected to climb and Cos with debt will see their P/b drop.
There is no Book value if the Intangibles are discounted .Hence the slide.
The net Assets w/o Intangibles is about $0.75bn while the Liabilities are over $1.0bn. Because of this the NAV w/o intangibles (No one can value) is -ve.
Hence theco is being heavily shorted by those who understand value.
The lost a key Customer after the acquisition and a few Product launches due 2nd half 2016 are delayed whilst restructuring costs are up. Their turn around date is 2017.
They face a big loss because of Consolidation cost with their acquisition. They expect 2 -3quarters of lossbefore the turn around. The pvt Hedge Funds who may have an inside track have been short since the aquisition. I expect it to stabilize around $12 or os. Most small -Meduim Cos see a low near 1/3rd the high.for that year.
Patience will be rewarded but timing is important when it come to small fry.