RE:PhilidorAs I explained in a prior post I am not a basher, nor am I short VRX, nor would I even consider shorting VRX. When stocks get beat up for whatever reason, they almost always become oversold - and these situations are always of great interest to me. I bought CRX under $30 and I bought DH at $31, and I considered buying VRX after the Hilary tweet, but didn't. Then came the Citron report and I took another look. But what disuaded me was the lack of a prompt explanation for the Philidor relationship ie appointing a committee and then a couple days later simply writing off Philidor. We still have no explanation, nor will we ever get one. Paying $100M for an option to purchase at zero dollars is absurd. This was a purposely deceptive transaction. I am a former CFO and distressed lending professional - never seen anything like this. Pearson should have been able to provide an immediate explanation. So it's not the $100M, its the appearance of it all. When they announced that a committee would investigate the Philidor relationship, that was it for me.
Now they have further problems - where is the growth going to come from? The muted opportunity to jack up prices will limit organic growth and acquisition opportunities will dry up as long as the share price languishes. A bit of a chicken and egg thing.
Furthermore institutional money will not go near this name and there is a big risk now that hedge funds will exit (and unlike institutional investors, hedge funds may have no choice because their positions are often highly levered and they may be facing significant redemptions).
Of course I may be totally wrong and be missing a great opportunity and unlike the bashers, I will readily admit this. But the risk/reward is just not there for me. And of course I may yet step in, but not right now. Also I think it would be totally foolish to short at this point and anyone who has been short would be a greedy fool not to cover IMHO.
I take with a grain of salt any post here that definitively states the stock will go up to "X" or the stock will go down to "Y".