RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:GBP / USD Forecasts Slashed by Credit SuisseThanks Lattice. I did read it. Even the author says it best:
"The near collapse of Valeant is due to various factors, but at the center
is a flawed strategy. Buying companies and then stripping them of their R&D activities led to greater debts to finance these transactions and worsening cash flows. Without the cash to carry on business and pay the debts as they come due, adversity was inevitable."
I fundamentally do not believe this is what Concordia does. A NUMBER of metrics the prof uses, if applied to CXR, show a significantly better picture. For example, goodwill as a percentage of total assets is about 15% compared with Valeant's 35%+ when it collapsed. 98% of the goodwill was generated when they bought AMCO - a company which has no overlapping business to cut. Seen through the eyes of a "normal" acqusition - one not meant to strip out the company to barebones - the acqusition is not unreasonable.
I could go on but real life calls. If the short thesis is predicated on this being another "Valeant", then I'll sleep more comfortably tonight. I guess I'm still looking for that "aha moment" on when I'll see the short thesis.
Lattice wrote: @visionaryfool, You statement that there was no accounting issues with Valeant aside for a $50M restatement is laughable! The $50M is what they threw Schiller under the bus for, that's all. Investors should just admit that they were had on Valeant and will be a zero by the end of the year.
I encourage you to read an article by Ed Ketz, and old accounting prof of mine Titled "A Predictable Collapse: Crunching the numbers on Valeant Pharmaceuticals," published in Accounting Today. His twitter is @EDKETZ if his article is not on the net.
Concordia recognizes revenue on shipment not sell through to customer. Some of the most notorious examples of accounting fraud used the same revenue recognition policy and coupled it with undisclosed rights to return unsold product. Their reserves were set improperty, revenues were inflated and the company's stock eventually crashes. The playbook is the same.
visionaryfool wrote: His "tag" didn't reveal anything. There are no accounting issues with Valeant.. aside for $50M restatement ... on $10B plus revenue.
I hope he looks closely at it.
pineapple1 wrote: This dude is a forensic accountant and was one of the first to correctly tag Valeant. If i were long I would be terrified of what he may find.