Keep Calm and Carry On - Brexit Update Brexit obviously had a negative impact on CXR stock’s price, however, the true impact on Concordia’s operations is still unclear. As a chunk of their debt is in U.K. pounds, the devalued pound will help somewhat which of course the shorts dispute. I wanted to update you with where we are at with the whole Brexit palaver as I have been following closely.
Official response from Concordia regarding the impact of Brexit and the weakened pound came June 28th:
The depreciation of the pound sterling relative to the U.S. dollar does not impact the Company’s ability to service its debt and meet its earn-out obligations in 2016. Beyond 2016, the Company will monitor its hedging needs.
“Operationally, our Concordia International segment is continuing to perform as expected,” continued Concordia Chairman and Chief Executive Officer Mark Thompson.
Source:
A second EU referendum is off the table, despite the efforts of 4.1 million Brits signing an online petition. Government have said they will move forward, however, it is not over yet...
More information:
...later this month we will see the first legal attempt to prevent the new Prime Minister (Theresa or Andrea) initiating Britain’s withdrawal from the EU by triggering Article 50.
More information:
Theresa May and Andrea Leadsom will be battling it out to become the next leader of the Conservative Party which will give them the title of Prime Minister. If all goes to plan, without delays, either one should take over the party by October at which time, they will trigger Article 50 (required to leave the EU). Once this article is triggered, the U.K. has 2 years to exit.
With the challenges due to this EU referendum not being legally binding, this could take some time.
Some believe that Brexit still might not happen, including the Italy’s foreign minister (in a recent interview):
- https://www.bbc.com/news/video_and_audio/headlines/36753697
The legal challenge may be what the government needs to be able to stay within the EU without going against the people's vote - they may have no choice but to stay if that's what the courts decide. The main rats who led the Brexit campaign, Boris Johnson and Nigel Farage, have since jumped ship after creating this storm. They never expected to win and their campaigning based on lies was purely to boost their own politcal careers, which are now over.
The fact is this stock has become a target of short-sellers as I had mentioned in an earlier post a couple of days ago:
I personally think the risk of shorting this stock is a very dangerous game to play as all we need is strong Q2 results with no negative revisions to forecasts which will back up Mark Thompson’s claim Concordia International segment is “continuing to perform as expected”.
Analysts are predicting the stock will only go up from here. I believe only one has a “sell” rating. The rest have “buy” or “hold” ratings with target prices way above what they are now.
The odds are stacked against the shorts but they continue their attack nonetheless. I just wish when the shorts on this board make sweeping claims about Concordia, to provide a link to their sources. This board is about sharing information, both positive and negative, about CXR stock to allow the longs and the shorts to make investment decisions based on factual information. This board shouldn’t be for bashing the stock with claims of corruption with no material to back up these claims. Same goes for pumpers. These kinds of posts don’t help anyone and just dilute the quality of this board.
Have a great rest of your weekend everyone and as the Brits say, "Keep Calm and Carry On".
