RE:Easy Short Oct 2016 CXR - Holding steady -2% to -3%Zoo, they also said "legacy" airlines were going to disappear , but they are doing very well thank you
TheGreatKazoo wrote:
Bravo to all investors with a short position on Concordia. Ironically, I am just watching from a distance.
I am cautious of a "catch" here. This short seems "too easy"?
Bulls, please help me out. Tell me exactly how this company can more forward given its current mortally wounded state? I may be wrong but this feels like an Enron? That's just an opinion. Nothing has been proven in a court of law.
Others have published their short thesis, here is mine which mirrors some of the same points:
1. Shareprice is currently near worthless, it's less than $300M CAD, debt is over 10 times that.
Which, effectively, means when you buy $1000 worth of CXR at today's closing price of $5.87 CAD, you efffectively are buying $9000 worth of debt. Buy into Concordia long and you're -$8000 net in the hole right off the bat!
That big debt needs to pay back over the coming years. Which what? A questionable portforlio of "legacy" pills. "Legacy" is really a fancy way of saying these old pills are unprotected and "out of patent" protection. That means, that barrier to entry for the generics is minimal. Marketing 101, "how big of a moat do you have?" At Concordia, none and the small one it had will get filled with government bulldozers funded by happy tax payers who object to abuse of sick people.
2. Market share across the board is declining. Price gouge and your customers (patients, health plans & medical support structures) will find alternative treatments and will change laws to prevent monopolistic predatory behavior. Bulls, list the top ten revenue generators the company in 2016 and their future prospects given the "growth by price hike" gig is OVER!
3. Directors do not appear to have any or many shares in the company. The last big transaction was over $2M shares moved earlier this year at substantial price and 1/4 of this was sold by the CEO having just guided higher "firing on al cylinders" but delivery a disaster of a quater with lower existing growth becaise of competition from generics
Those are the big threes?
Anyone which to publish theirs as well?
Bulls, feel free to do your but please obmit anything based on "adjusted EBITDA". That's the "Ace" that got so many of you in trouble in the first place. Let's leave that one on the side for now.
But what I dislike the MOST!!! Is not having clued in to this opportunity sooner.
TheGreatKaZoo - defender of Justice! "LET THERE BE SANITY IN THE ZOOS!"