MB, you make no sense... if the earnout was based on performance , then the performance must be good , if they have to pay the earnout. If you say this cash cow is not performing , then the earnout doesn't have to be paid. You can't have it both ways you imbecile.
MegaBear wrote: cg16, answers to your specific questions:
1. Where the shares came from for all that volume?
It's called the float. A massive pool of shares that can be bought through competing exchages and systems connected to the TSE and Nasdaq.
2. How can shorts cover 10m shares that fast and then reshort?
Market buys and sells and/or set triggers. Big market players trade with systems and programs, algorithms.
3. What rumor was scary enough to pull them off of their unshakeable thesis?
Yes, for technical traders and systems, the buy signal was flashing green late Thursday and Friday morning, it was screaming. "White solidier candles", one after the other. The pros know that there is news, it's big, and they don't want to risk it. Many shorts would flip to long. So 2x the buying, switch $1M from short to long and you have $2M of buying power. "Them" is not one group, it's "market professional" all competing with each other with big money. And don't forget the legions of little guys. Someone talked about "birds flying in formation". Something spooked the flocks and they went long.
Now, the anchored shorts? The cohodes, latice, craigbads of this world? Don't be surprised that their stop loses have not been trigered so they haven't covered one bit. I don't know how much craigbad deals with, if he is a small retail trader which he appears to be, he's small potatoes. The cohodes/latices of the world play with millions if not tens of millions.
4.Also, why do you keep saying that Cinven won't be paid when its clear that CXR easily has the money now to make the payments?
Because the earn-out was based on the performance of this new "cash cow". But they couldn't make the payments! They had to defer the payment and push back the first one to December and push defer the rest to February? This is like not being able to pay for your credit card balance and you get a pay-day loan to keep yourself running on the short term. You think that type of person is able to pay their credit card balance in a few months given the new cash is really a loan that also requires interest payments!? The only reason they were able to get this money is because it was "Senior First Lien", effectively screwing all the existing debt and bond holders (and shareholders, but that's nothing new since July 2015).
5. If their press release can be trusted, they will pay the first half from UK operations and they just added $330m on top of that. Im not saying the company won't eventually fail, but there's no facts to support that they won't be able to make the $180m owed to Cinven. So why do you keep saying that Cinven will keep Amco? What facts do you base that on?
First, how do you come up with $330M, the disclosed was $350M pre-commision. Tell me where the net number available to Concordia is because it was not disclosed. Given the risks and experience by Goldman, I don't think the terms were favorable to Concordia.
You need to add the operational costs, debt servicing cost, legal costs and earn out to Cinven.
As the bonds crash and investor confidence is at all time lows, if you were an unsecured lender, the main guy here leaving and under a lot of heat, you would do everything to pull any outstanding credit which means you have to be careful to assume credit is going to be there when rating agencies likes S&P and Moodys are saying the new *secured* debt is biased negative outlook!
Cinven has structured the deal so if they lose, they lose as little since they reclaim AMCo debt free!!! So they took a bath on the shares but they structured the deal not to release the deed of Amco until the earnouts were paid probably knowing Concordia would likely not be able to meet the books. Cinven are true market professionals.
Now if Concordia has a spectacular Q3, then Concordia might be in a position to make the first December and then the February payment. But if they don't, payments don't get done and Amco is not deeded to Concordia. Why do you think Cinven still has AMCo listed as an investment instead of having "Concordia International"???
https://www.cinven.com/ourinvestments/currentinvestments.aspx
That page was updated several times this year and I know what was added, delete and changed.
AMCo was not replaced by Concordia, why? This is a leading European hedge fund.