RE:What happens if question...meetoo or anyone elsedaveinmiss wrote: I agree with Rad that meetoo has been a fountain of logic and knowledge...he convinced me
as I bought back in at .62 this week.
I am wondering what if the UK Competition Bureau comes down with a big monetary policy specifically on Condordia and if this happens before re-structuring where do they stand? Would they become a shareholder?
daveinmiss, I would not put an ounce of worry into the CMA thing in the UK, and here is why:
1. They issued two Statements of Objection before the most recent one. It's been over a year and they still have not even decided whether or not to continue the investigation or drop it. In its most recent press release, CXR stated that they had received indications that one of those investigations had been moved to the slow track, whatever that means, and the other (although assumedly continuing) was not considered a priority by the CMA. Any decision, penalty, etc., can and will be appealed, possibly through multiple courts. Clearly, it is going to be years before any of this is resolved, if the result in the first instance, whenever it comes, is negative. Then there is always the possibility that they will cease all of the investigations, in which case the result will be favourable for CXR and come alot sooner;
2. While the management of CXR in respect to the matters at issue certainly did not behave like choirboys, there are some pretty vague and nebulous legal concepts at play here. In fact, I believe that the Pfizer and Flynn Pharma will win their appeals, but their cases are different in any event. The cases against CXR are dependent upon the CMA demonstrating that CXR enjoyed a monopoly or dominant market position that, in fact, it never had. That is the central problem with what Thompson and his idiot gang agreed to pay for the companies that comprise CXR today: They do not have a dominant or monopoly position in anything. With few and minor exceptions, anyone can compete with them anywhere, and, believe me, they are. Why do you think the revenues from Donnatal and Plaquenil, and many of their other products, are dropping so fast? Nevermind the CMA, the market is keeping the company honest;
3. No one at CXR forced the NHS to purchase any drug from CXR. It was all done with full transparency. The NHS had remedies if it did not like the price. In fact, it has since exercised some of those remedies. It could have delisted the drugs from its formulary. Or, most notably, it could of imported the drugs from other countries where the price had not spiked. Competition cases can be difficult to defend in democratic global economies where people are free to name their price and the buyer gets to decide. They can be effective to stop the offending conduct going forward, and they already have been in this case. But to act retrospectively, and penalize activity that occurred in an open and transparent market sounds unconsitutional to me;
4. Most of the impugned conduct was perpetrated by previous owners of the CXR brands. If and when a civil penalty is meted out, it will be mostly against them. There would be no purpose in targeting CXR in its current incarnation, particularly given its precipitous fall from financial grace over the last two years. Surely, anyone vested in CXR at the relevant time has already lost enough. As for me, personally, I wasn't an investor at the time, but I would not give a damn if the CMA hit Cinven and its executives really hard. Meanwhile, the existence of the investigations themselves, without even a determination, have already had the desired impact on CXR, both financially and in terms of its conduct going forward;
5. The media and the politicians in the UK are under immense pressure to get their healthcare costs under control, and to be seen to be doing something about it. While the CMA investigations are more than fluff, I believe that they are mostly about the latter. It's politics at play and, at the end of the day, it is going to peter out. If they thought that they had a strong case, they would have mounted it by now. The more time that passes, the less likely it is that the investigations will come to anything, and the less they will be able to justify a penalty against the current owners and management of CXR.
All of which is to say, that the CMA investigations have no impact whatsoever on my assesment of what will happen in the short term with CXR, or the long term for that matter.