RE:RE:RE:RE:Potential New CXR PartnerThe only stakeholders that would get the assets in a restructuring are the bond holders. Unless Knight buys the debt on the open market, there is no buying assets on pennies on the dollar. Knight does not have that kind of capital (over $3B). The play here is either a merger or commercial marketing/distribution relationship.
quote=Craigbad]I admire your loyalty to th stock, but has cost you dearly. I encourage you to go back and read the call transcript from Goodman on seeking alpha. He raised his cash hoard to buy assets for pennies on the dollar, not partnerships. There are numerous things that can happen any day that can tip this delicate scale between survival and not surviving for this company. Only one needs to happen. If you don't know what they are or are just choosing to ignore them, i pity you. The market is forward looking and people won't pile into a stock because they might not go bankrupt if everything goes perfect. Very little upside here, 100% downside potential in my opinion. Happ trading!
Lumberfeverlong wrote: Craig BAD, I'm waiting to meet Craig GOOD one day. I imagine that will only be once you cover and go long, which will not be too far in the future. CXR is not close to being insolvent. They have a payment hump to Cinven this year, but as I have already set out over the weekend, they will still have $50M of extra cash at the end of the 2016 and a $200M undrawn credit facility. Once Cinven is paid and assuming ZERO growth in 2017, they will generate an additional $200M in cash. That is excess cash of $250M (as well as the undrawn line) in about 16 months after servicing debt and paying all operating expenses during the next 16 months. This is not a company that will run out of money. I agree that Goodman is a smart operator and wish he would replace MT in any merger of the two companies. If no merger, there is a mutually beneficial commercial relationship to structure here and Goodman would see that as well.
Craigbad wrote: Goodman from Knight already talked about this on one of the last conference calls. He said he figured there would be a fire sale early next year and has the cash ready to deploy to pick the bones. He alluded to companies who overpaid and overleveraged for weak assets and figured they would collapse before too long. He didn't specifically mention cxr, but they certainly fit the profile. He is one of the smartest operators in the industry and this confirmed my thesis that there is a good possibility this equity could be worth zero.
Lumberfeverlong wrote: I have been trying to figure out who would be a good partner for CXR from a merger or cross-marketing perspective. I think Knight Therapeutics would make a good parner. Good portfolio of proproietary or licensed drugs and loads of cash with limited international distribution network. Any thoughts?
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