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Concordia Healthcare Corp. T.CXR.R



TSX:CXR.R - Post by User

Post by smallshorton Sep 26, 2016 10:02am
155 Views
Post# 25277608

Short Thesis

Short Thesis

1. CEO in untrustable
As proven with the missed guidance and pre-planned insider selling during a blackout period which they knew would happen with the creation of the Strategic Review, The CEO's action here and with his previous companies, speaks for itself.  So does the failure to explain himself, using offshore accounts to transfer shares out of our view. This borders on fraudulent activity which should be investigated by regulators.

2. AMCo deal is highly questionable.  
Price hikes just before the sale to Concordia and management agreeing to Earn-out pay in the 144 pounds which today is worth $186M USD.  Several scrutiny by the press and public in the UK on AMCo's dealing and negative sentiment on the "brothers" that built it.

3. Quesrtionable 4 drug "deal" with Cinven "third party is an extra $72M USD
That's clearly specified in the "Consideratiion" section of the Sedar and SEC filed documents last year.  Longs don't read those documents?

4, Write off of half a billion dollars of Covis acquisition
That acquisition was from April 2015.  Either complete mismagement or fraud.  That amortization was over 25 years in the books.  You can expect more write offs.

5. Plummeting sales of Donnatal
Overcharging has caused US health insurance providers to no longer cover Donnatal.  Patients are finding alternatives and formulating phamacist are making the generic version of the drup onsite with the main two ingredients.  Drug is not FDA approved but still sold for now.  Drug has no DIN number and is illegal in Canada. Until recently, Donnatal was Concordia sole notable drug.

6. Tecinical Traders and downtrends
There is a downtrend on the charts.  Until there is a real catalyst to turn this around, this is continuing to go down.

7. Few directors own any shares
At least long.

8. The CEO is a banker, not a pharma CEO
Look at his past positions and activity.

9. Cinven still holds AMCo
They are listed as a creditor and until the earn-out is paid, they can make a claim to get AMCo back since AMCo is not integrated with Concordia, they run it as a separate entity. AMCo listed as a Cinven investment Concordia isn't/

10. Lock up of shares expired on January 2015 for Cinven
Active selling started on the stock cratering it this this.

11. Assets prices worth less then debt
Concordia was able to fool a lot of people including bankers.  Some of which RBC Capital is "holding the bag" and will recommend to its retail discount clients to buy the stock so they can get it off its books.  If asserts are worth less, equity is worthless and so is the stock price.
 

 

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