Post by
PokerSubstitute on Sep 07, 2016 4:56pm
The teeter-totter
Nobody knows what MT is going to say on BNN. It could be good news, it could be bad news, it could be meh.
But what we do know is that the CXR share price is a tenth of what it was earlier this year. If you compare the share price to a teeter totter, we are hovering just above the pavement.
If MT goes on BNN and lays yet another egg, CXR goes down a few more bucks, but there is little room before we hit the pavement. Either way, complete and total disappointment from the strategic review is hopefully at least somewhat priced in.
If MT goes on BNN and announces a distribution agreement, we are going way up. With the combination of low share float, heavy leverage and huge short interest, CXR could make a giant run. Anything to improve free cash flow could change valuations markedly.
Is it so unlikely that MT executes a distribution agreement? I think it's at least possible. The NRs and press conferences have been telegraphing that the strategic review has apparently been alive and well, so much so that a potential transaction is before the entire board. Given CXR's market cap, almost any fresh initiative/agreement/transaction will move us up.
That said, CXR lacks credibility in my books. The CXR release from August 3rd was the most misleading news release I have ever seen. In that release, the company chose to address a red herring - that various drugs were being removed from the CVS formulary - and indicated that this news was not material. MT also referred to his confidence in the business in this news release. However, the release failed to disclose that in fact the impending quarterly results were far worse than the most pessimistic analyst could have dreamed up. At best, this news release presented a selective version of reality.
Despite my concerns with CXR credibility, I'm optimistic that MT is going on BNN. If the news is meh, at least we know that someone at the company still has a pulse and the strategic review is ongoing, if MT says "they are going it alone" then there is not much more to fall, if MT actuallys brings the goods, there is a lot of room on this teeter totter's swing.
Another comment: if MT is going to talk about news next Friday (whether CXR has flamed out again or actually accomplished something), it ought to be released beforehand. Let's hope that something interesting comes out in the next week.
All in my opinion. Good luck to all.
Comment by
Lumberfeverlong on Sep 07, 2016 5:06pm
Finally, someonw with something intelligent to say. Thanks for that well-thought out post.
Comment by
Marky1 on Sep 07, 2016 6:32pm
Poker...thank you...well said!
Comment by
krmelin1 on Sep 07, 2016 7:42pm
He might as well show up with one of the water squirting daisies tacked to his jacket.