another hit article by bashers. when you read the article you see that they are exiting the fund with a profit and the position is small 13 million, and they praised ackman, but you sure wouldnt know that by reading the headline. more pure manipulation. valeant is truly being hit from every side right now in an attempt to shake out weak hands before Q1 earnings.
i had posted in a previous message that cash flow would be $6 billion this year and meant to say EBITDA, but got to say that when you dig into the cash flow from 2015, which was 2.2 billion, you see that the acquisitions and financing done in the past year really make that number not a good indicator of the company's ability to generate cash. saying that there is no money to pay shareholders because there was 2.2 billion in cash flow last year doesnt account for the way that salix was purchased and partially financed by cash and also the cash used for integration, etc. the real cash the company is generating is the EBITDA and that is projected at $6 billion for the year, less maybe 2 billion of interest expense? yes there will be other use of cash, but they are conservatively projecting they will have 1.7 billion to pay down debt. i guess the real question to me is whether the business can grow without acquisitions this coming year and the next. it all comes down to new products launched. i noticed that for bausch and lomb, both ulta and biotrue need alot more capacity than in the past year and much of that does not come online until Q3 and Q4. also, the trend on xifaxan scripts was looking good, so does that business grow or stagnate? i have seen very little real discussion of the factors that really matter and lots of BS about the company.
i was wondering if ackman also wanted to dollar cost average down and so they are happy if the stock stays down. i think they are both focused on the long-term and dont much care about the price over a few weeks.
but it looks like the owners of those $30 puts really did quite a job of moving things down during the regular session. the trading of vrx is really just crazy this past week.
does anyone know if it is illegal if someone knows that endo will report bad earnings and then shorts valeant, knowing that it will fall in line with endo? just curious if someone set up a great trade (buy put options below 30 for nothing), wait for the crash and continue selling shares at end of day to get your put options in the money. and they probably have call options set up for a later week so as they buy back shares later they earn money on the downside and upside. if you know endo was reporting bad earnings you could just set this all up.
look at chanos statements and he compared cash flow in 2015 to the current debt load. you cant compare yesterday's earnings to tomorrow's debt load. bausch and lomb is a great business and growing further. salix was bought for the pipeline of drugs. chanos probably had some inside information that endo was going to report bad numbers and he knew he could crush valeant. chanos is a short term trader, not an owner, so he is usually just pumping his short term play, not a long term position. the main problem with his statements is that he is valuing vrx on break-up value. the company doesnt need to get broken up here. it can generate plenty of earnings to pay the interest and pay down debt. ackman is an insider and made very specific statements to reiterate $8.50 - 9.50 of non-GAAP earnings this year. that means $6 billion of cash flow. chanos was citing $2 billion of cash flow from last year, before the salix acquisition.
not sure if i agree with your thesis on the timing of the Q1 report. with the last 10K the reason they were late was due to the audit committee findings. with the new 10K, there is no reason they would not have been working on it all this time. can you imagine the CFO saying to the BOD, yea, i was waiting on the 4/29 filing to get started on the Q1 numbers? really? all the accounting work that needs to be done to close the period would have happened on normal schedule. also, the reason they waited until the 29th exactly was so they could announce earnings after the senate hearings. you dont think they actually finished the previous 10K at the end of the day on the 28th, do you? of course the new BOD and CEO need to do their work on this to sign off, but i dont think that takes an extra month.
and so they can run it anywhere they want until the Q1 earnings report comes out.
that is probably the reason for a lack of buying support. valeant simply needs to announce the date of their earnings report. ackman, you said you would provide better clarity and communication to the market, how about letting the market know that earnings are coming? how about papa having a meeting with employees and giving them the facts of what is happening with the company, instead of the constant barrage of negative news articles?
this was not a massive sell-off in terms of people dumping positions. i think once the stock dropped the options writers decided to kill any rebound and have been just moving it sideways, killing any movement back up. this stock is such a trader's stock, the number of actual buyers and sellers is very low compared to the traders that run it up and down.
the short sellers just think they can gang up on it since ackman is under so much pressure. they might still have another push in them, tough to tell. this plunge on endo is ridiculous, since valeant already lowered guidance. the shorts should be looking at pharma companies that still have guidance that does not reflect any pricing decreases.
seems a bit crazy, since valeant had already plunged and is being repaired with a new ceo in place. but that is the way wall street works. the geniuses on wall street cant figure out that both these companies have put in place numbers they will beat for the coming year.
what a horrible news week for a company. would be nice to turn the corner on the bad news. can we get an announcement of the earnings date after the close today?
this was the valeant week from hell. just bashed constantly by the press. cant wait for the earnings release to come out and clear up alot of this BS.
let the shorts think about their exposure over the weekend