Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Quote  |  Bullboard  |  News  |  Opinion  |  Profile  |  Peers  |  Filings  |  Financials  |  Options  |  Price History  |  Ratios  |  Ownership  |  Insiders  |  Valuation

Bullboard - Stock Discussion Forum Concordia Healthcare Corp. T.CXR.R

TSX:CXR.R - Post Discussion

Concordia Healthcare Corp. > Globe & Mail Article
View:
Post by retiredcf on Oct 05, 2016 1:20pm

Globe & Mail Article

Twenty five minutes into a profanity-ridden presentation at Jim Grant's Fall 2016 Investing Conference in New York City, Marc Cohodes paused his speech to don a red jacket emblazoned with a maple leaf on the right breast.

So attired, the short seller proceeded to launch into his bearish theses for the collection of Canadian companies he's betting against.

Mr. Cohodes, the former managing general partner at Copper River Management and current chicken farmer at Alder Lane Farm in California, revisited the cases for why he's short Valeant Pharmaceuticals Inc., The Intertain Group Ltd., Concordia International Corp., and Home Capital Group Inc.

At the conference on Tuesday, he unveiled a short position in Equitable Group Inc., a Toronto-based provider of mortgage financing. The company disputes Mr. Cohodes's claims about its vulnerabilities.

While Mr. Cohodes only manages his family's account at this time, he was praised as "the highest-profile short-seller on Wall Street" by the New York Times back in 2001. He's also one of the most rambunctious, having famously sparred with companies like Lehman Brothers, Overstock.com, Krispy Kreme, Adobe Systems, and Lernout & Hauspie, becoming well-known for his unusually blunt speech and theatrical antics that include throwing a penalty flag at an executive who refused to take his question.

Shares of Equitable tumbled in Toronto during the short-seller's presentation and ended the session down 6.3 percent, helped on their way by measures to cool the real-estate market that Canadian policy makers had announced the previous day.

When asked why the Great White North has proved such fertile ground for short-selling, Mr. Cohodes highlighted the nation's patchwork regulatory regime, which he dubbed the "alphabet soup bunch." Oversight of financial institutions, he noted, is much less centralized in Canada than it is in the United States.

The crux of Mr. Cohodes's case against the mortgage provider lies in its exposure to Alberta, the oil-producing heartland of Canada, which is still reeling from the downturn in crude prices. The province's unemployment rate has spiked to 8.4 percent as of August, up from 4.9 per cent in June 2014 when oil was still above $100 a barrel.

"They have $1.2 billion of uninsured loan exposure in Alberta," he said. "That's 130 per cent of book."

A second-quarter earnings report indicated that Equitable's provision for credit losses was less than one basis point of its mortgage portfolio. If Equitable's experience ends up anything like that of Texas banks during the last supply-side driven oil crash in the 1980s, loan loss provisions will move meaningfully higher going forward, he argued.

Raising loan-loss provisions by 160 basis points would wipe out one year's worth of the company's earnings, according to Mr.Cohodes.

Andrew Moor, president and chief executive officer of Equitable Group, disputed this reading in a phone interview. "In the last quarter we were able to report that arrears [in Alberta and Saskatchewan] had been reduced quarter-over quarter," he said in response to some of Mr.Cohodes's claims. "We've had no meaningful losses and don't expect to have any in the next little while."

Most of the company's loans in Alberta are in Calgary and Edmonton, which are among the more diversified economies in the province, Moor added.

Mr.Cohodes opined that both Equitable and Home Capital Group Inc. - the other Canadian mortgage lender he's betting against - would be unlikely to pass stress tests required by the Office of the Superintendent of Financial Institutions (OSFI).

The short seller also alleged that Home Capital has been "staged" - that is, has been categorized by OSFI as having deficiencies with either its financial condition, policies, or procedures.

"I happen to believe and believe strongly that HCG is being staged by the banking regulator in Canada," he said. "I would love for them to deny it."

Mr.Cohodes did not provide evidence for this claim in his presentation, and Home Capital declined to comment through an external spokesman. A spokesperson for OSFI said the regulator is unable to discuss individual financial institutions it regulates and supervises.

In July 2015, the lender revealed that income information on some loans it originated had been falsified. The stock price, which has been a frequent target of short-sellers, is virtually unchanged since this news became public, and closed at $26.67 on Tuesday.

In some cases, Mr.Cohodes's battles against Canadian companies have turned personal, as is the case with Concordia International, the pharmaceutical firm headquartered in Oakville, Ontario.

Mark Thompson, the company's chairman and chief executive officer, is suing Mr. Cohodes in Ontario for defamation and libel over comments the short-seller made about his work history.

That was in late April, when shares were hovering around $3. They've since slipped by more than 75 per cent.

Calls to Concordia International and emails to Mr. Thompson were not immediately returned.

"You're going to have to get a chain and put it around my neck to drag me off his carcass," the short-seller said in reference to Mr. Thompson.

Wed, 5 Oct 2016 13:04 EDT

Comment by LaticelnExile on Oct 05, 2016 1:30pm
This post has been removed in accordance with Community Policy
Comment by Investin on Oct 05, 2016 1:33pm
LAXTICE, THE PRICE WILL RECOVER, AND COHODES WILL FOCUS MORE ON RAISING CHIKENS AND COWS TO PAY THOMPSON 4 ML.
Comment by Craigbad on Oct 05, 2016 1:41pm
Thompsons lawsuit won't go well, he has committed multiple securities violations since the suit was filed. He'll end up paying Cohodes legal bills. Thompson will just further embarrass himself imo.
Comment by Investin on Oct 05, 2016 1:44pm
MAY BE THAT IS WHAT YOU THINK, BUT THAT DAY YOU WILL NEVER SEE, KEEP DREAMING.
Comment by PROtrading on Oct 05, 2016 1:45pm
That's assuming Thompson makes it to that court before the other court....  The SEC will have no problems here from my perspective.  Not sure what the OSC is doing but my interaction with them has me convinced they can't regulate a thing!!!  And I have some really, really sad proof on that which I will show to anyone knocking!  We have a group of clowns regulating the ...more  
Comment by Lemerson on Oct 05, 2016 2:58pm
 Okay, can you post this sad proof or PM me.
Comment by PROtrading on Oct 05, 2016 5:29pm
Someone real, in person, with authority.  Sorry, I don't take anyone here very seriously unless I know them in person. I can count these guys on one hand, most read but don't post.  You're not one of them and those guys know exactly what I'm talking about.  They wouldn't be asking in public forum! 
Comment by Lemerson on Oct 05, 2016 5:39pm
Okay, Pro. You could have sent a PM, I don't even know why I bothered to ask. Waste of time
Comment by LaticelnExile on Oct 05, 2016 1:45pm
This post has been removed in accordance with Community Policy
Comment by LaticelnExile on Oct 05, 2016 1:43pm
This post has been removed in accordance with Community Policy
Comment by Investin on Oct 05, 2016 1:47pm
TODAY HE TWEETED THAT HE HEARD UK IS PULLING OUT SOME OF CONCORDIA'S DRUGS, WHAT YOU THINK HE IS, I MEAN ABOUT THIS?
Comment by LaticelnExile on Oct 05, 2016 1:50pm
This post has been removed in accordance with Community Policy
Comment by Craigbad on Oct 05, 2016 1:51pm
why do you think they are crawling to pirate equity for cash! The story will unfold rather quickly.
Comment by Investin on Oct 05, 2016 2:24pm
https://archive.fortune.com/2008/10/10/news/economy/river_boyd.fortune/index.htm Will history repeat it self? COHODES will JUST SEE.
Comment by PROtrading on Oct 05, 2016 1:35pm
And for the record this shorty is "well-known for his unusually blunt speech and theatrical antics", I know it sounds like me, but it's not.  I hear he actually doesn't appreciate my "competition" on that front ;-)  Plus I'm a proud Canadian and I'm not sold on his bet against these mortage providers but these have made my "short list"  ...more  
The Market Update
{{currentVideo.title}} {{currentVideo.relativeTime}}
< Previous bulletin
Next bulletin >

At the Bell logo
A daily snapshot of everything
from market open to close.

{{currentVideo.companyName}}
{{currentVideo.intervieweeName}}{{currentVideo.intervieweeTitle}}
< Previous
Next >
Dealroom for high-potential pre-IPO opportunities