I doubt those estimates are valid today. Prices are well below worst case estimates for this year. Those guys cannot predict prices 6 months in advance let alone 3-5 years.
This mine will not get funding until the copper/nickel glut is over. It is unknown when that will happen. (and anyone who says they know when that will happen is an idiot.)
given the Phildor monkey business. The 78 pharmacy revelation only adds to concerns. If I were an insurer I would demand additional documentation that a script requires the brand name and not a generic equivalent.
I would also check into the background of any pharmacy that specifies a Valeant Brand when a generic equivalent is available.
I think the many alias pharmacies could be used to hide to fact that Valeant is really the entity behind the script filling. I imagine that the insurers have trip-wires in their automated billing software that get hit whenever the number of scripts filled by a single pharmacy crosses a prescribed number or gross dollar amount. Whenever these trip wires get hit a human gets involved (to ensure no monkey business is going on).
This is where a large number of pharmacies could come in handy.
Anyone out there familiar with insurance billing practices?
Ackman (Pershing Square) = Berkowitz (Fairholme). Both run very concentrated positions and make name for themselves. Berkowitz named fund manager of decade. Immediately thereafter ran into problems with some of his highly concentrated positions. Gave away much of decades worth of out-performance. Ackman is looking like he is headed down the same path with VRX leading the way..
Having a large number of shares in a worthless company is not going to help. There are not enough idiots in the entire iron range to make that work.
The point I was trying to make is that Glencore is not interested in PLM's high cost product. (and won't be until copper prices recover - which could take a decade or more)
In the absence of an explanation from management, one must speculate as to how the collection of pharmacies might be used.
1) Use multiple pharmacies to tease out what the maximum amount that an insurance company will pay for your drug. (unethical, but perhaps not illegal)
2) Use multiple pharmacies to spread out charges for your expensive drug so that it does not appear to be coming from a single source. (again, sleazy, but not sure this is illegal)
3) Use pharmacies to record sales to manage growth (also known as channel stuffing or phantom sales, I think this is illegal)
Any other ways to use a large collection of "pharmacies"?
What shares? Are you talking about another secondary offering of Glencore shares? They did one a little while ago when the stock price was much higher.
Glencore stock has lost over 2/3rds its value in the past 18 months, mainly due to weak commodity prices and concerns over its debt load. It is unlikely they would raise cash by another offering given the low stock price.
Glencore is is already carrying about $50B in debt and is looking to reduce debt, not add to it.
They have received only a small fraction of the $650M they need for this project. I really doubt Glencore will fund the entire project - they have stated that they want want to reduce their debt load (not add to it). In case you haven't checked them out, they have an enormous debt load. A quote from Wikipedia - "Due to weak global prices for the assets Glencore owned, particularly coal and copper producers, and the commodities Glencore traded in, the company showed a net loss of $676 million for its operations during the first half of 2015. As of September 2015 the value of its stock had fallen significantly. Concerns cited by financial analysts included the weak global commodity market and Glencore's high debt. The company was reducing its $30 billion debt by selling stock and assets."
This project made sense years ago when it was proposed. It it not economic today.
This is a reasonable question that Valeant should be able to answer.
Exactly what is the legal relationship between these pharmacys and Valeant? Are they subsidiarys? Are they "independent" like Philidor (and yet Valeant has the right to purchase them for $0)
I would really like to hear Valeant's explanation. In the absence of such, speculation can run wild.
I would never have seen a connection between the list of pharmacys (and I do play chess and have seen most of Steven Kings movies).
I would love to hear Valeant's explanation as to the reasoning/need for creating this extensive pharmacy system.
The fact "The entities mentioned today appear to have been formed on or prior to
8/18/2015" means that this is an ongoing method of business - create a collection of "front" pharmacys and spread billing across the group of them to hide the fact that the Valeant is the one requesting reimbursement.
I cannot think of a valid business reason to create a large group of pharmacies. (Except to deceive the insurance carriers into reimbursement at higher rates.)
Would that be considered a civil or criminal offense? If the behavior alleged to have occurred at Philidor has been going on at a large scale at these 78 pharmacys, it would represent a major expansion of this problem for Valeant.
It would also point the blame on Senior Management and not just a single rogue pharmacy.
that appear to be front for Valeant? I wonder if these are part of the specialty pharmacys that make up 7% of revs. I suspect not.
Wait until insurance companies look into this. Reinbursement will suffer.
I was surprised to see how over-subscribed the exchange offer was. I suspect quite a few investors find themselves with more GE than they want (and not enough SYF).
I was expecting to see SYF drop a bit after the exchange, now it seems more likely it will rise.
Thanks for the info. I am surprised that Ackman would add leverage to what is already a very risky situation. Senior management cannot know for sure what lower management has done.
How do you know what his option position is? It would be interesting to know the strike prices and expiration dates. I wonder how thrilled his shareholders are to see him lever up on this losing position.
I don't know where anybody trying to get funding to open a new mine would find capital. The copper and nickel markets are at multi-year lows due to weak demand and excess production. All the major producers added far too much production capacity in the last up cycle. It may take a decade (and many bankruptcies) to get supply in line with demand.
A new mine is just not going to happen.