RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Nary any sellersI'm just trying to meaningfully understand the short side of the argument. I don't want to throw good money after bad and be stuck at a huge loss in a value trap. By taking a broader look at the picture, companies like Concordia who bought at the top of the market and loaded their balance sheet with debt paying high multiples certainly will be at a disadvantage and may have to take write downs on the large goodwill portions of their balance sheets. I'm wondering if this could further hurt the sentiment and shareprice. Also interested in others opinions on how hard it would be for private equity to just buy their own portfolio of legacy drugs and hire some managers as it would be way cheaper to do that. Solid opinions from both sides appreciated.
Lattice wrote: Craigbadboy, When stressed goes to distressed you get the "seeking strategic alternatives" language management uses. ENDP just joined VRX and CXR. Now private equity has their choice of garbage to buy and aren't in any hurry. The silence will be deafening.
Craigbad wrote: What would a buyout per share be if private equity was only willing to pay 5-6 times ebitda minus debt for Concordia? I'm guessing it would be less than shareholders would be willing to accept? One has to consider now that the debt and equity issuing buying rampage of companies like valeant and concordia has come to an end, the multiples for which private equity could actual pay for legacy assets might actually come down to 4-5 times as the market should become softer with less bidders. Maybe this is what the shorts are counting on. Private equity is not known for throwing money away, do you think they are weighing this option? Something has to explain the price action that most are missing.
sunshine7 wrote:
sorry, just noticed Craig said wma not DMA. IMO 200wma is meaningless for many known reasons.