Concordia Healthcare Corp. T.CXR.R

Wouldn't financing drive the price lower? +dilution & +debt?

[JAInvestor]

J

[wallop13]

No. Even if they were to issue 50,000 shares at $12 and put that money towards debt the share price would rise because the enterprise value would stay the same, but the bankruptcy risk would be lower. Hence the share price would rise. But the rise would be more limited because the market cap would rise twice as fast with double the shares.

[wallop13]

Sorry. I meant to say 50 million shares. Not 50 thousand.

[HamSandwich]

Who in their right mind would be on the other side of that taking the 50 million shares at $12/share?  You really think there's an appetite for that? We're a lot more likely to see debt converted into equity and existing shareholders taking it up the pooper than we are to automagically issue $600 million worth of shares and also raise the value of all shares outstanding.

[CNInvesting]

This company's value is getting slimmer by the day. I don't think anyone would want to do equity financing at this point. I doubt even anyone would want to be doing debt financing. Too many players already have their slice of the pie on that side. No, I think they have nowhere to run for more deals and are doomed to run the business, which so far isn't going well.

[wallop13]

Who knows. I was long, but not long or short right now. It's all so murky. Not sure what will end up happening. The management has really made a mess here. The torque that the debt now puts on this stock is joke. Shorts on black, longs on red, MT's spinning the the wheel. Doesn't make me feel too confident.    

[LaticeInExile]

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[CNInvesting]

It has to be a mistake...I mean even $1 million is enormous. It's like 1000 hours for lawyers charging 1000$/hour. Imagine if it were to be $100 million, I'm sure somebody would have said WTF.

[LaticeInExile]

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[LaticeInExile]

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[CNInvesting]

He's right that there's little value left to see in the NA portfolio. They bought worthless assets at a market high. Q2 transcript. https://seekingalpha.com/article/3999246-concordia-healthcares-cxrx-ceo-mark-thompson-q2-2016-results-earnings-call-transcript?page=1  

[Juice004]

Up until now the Covis Portfolio looked really good. They generated approximately 100M in revenue in the first 6 months of the year with gross margins around 86%. Not bad for a 1.2B acquisition. However, based on their reduced guidance for the 2 drugs that are seeing increased competition 100M seems to be the future annual revenue expectation now which would put the acquisition now at about 12X

[LaticeInExile]

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[CNInvesting]

Yeah and they were obligated to disclose it...otherwise business would be firing on all cylinders right now of course...

[LaticeInExile]

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[select1011]

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[Juice004]

With projections declining I estimate next year the whole NA segment should make 200M in revenues with margins ranging 85-88%. The international segment about 620M. An investor who is not as concerned with capital structure as they are with EBITDA or operating cash flows I think would be willing to pay 2.5X revenue for this segment and assume the 706M in long term debt from the Covis acquisition

[LaticeInExile]

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[Shane007]

LaticeinExile:  What is your position in CXRX?  Are you short?