RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:The bottom priceLattice, just want your take on why there are so many funds buying CXR if it's so plain obvious that this company will implode on itself ? I respect your opinion but I'm quite curious as to why you and a select few seem to be the only ones seeing this calamity.
Lattice wrote: donaldspice wrote: A company that just bought 4 new products doesn't seem to be anywhere close to having to divest anything. This is short rhetoric that has been imagined. The company would not continue to but products if they felt they were anywhere close to meeting their debt obligations
Yes they can, and this is how. They report higher EBITDA expensing these items as amortization, which is then dutifully added back into "adjusted EPS". This is the number that sell-side analysts use to give the nice and shiny targets (which is why targets for Valeant and Concordia are so to the moon). Higher EBITDA supports higher leverage but if the drugs suffer erosion you either have to continue to prop up EBITDA with new acquisitions. A company can only do this to a point where the balance sheet can only expand so much until you have onc that is ready to explode. Concordia's balance sheet is horrific (look at amortization, goodwill, and those unexplained receivables). Going down is the only thing you can count with this financial engineered marvel. The drugs are not enduring assets. The high short interest is counting on the fact that there will be a liquidity crunch against its annual interest obligation and two year contingent paper. In "short," the assets are not worth the debt.