Concordia Healthcare Corp. T.CXR.R

If you believe Concordia share price will recover

[argentia77]

why not just buy options? You can buy call options with a $9 strike that expire around Oct 21 for around $1.20. So 50 lots (5000 shares) would cost around $6000 plus brokerage fees. So if the magical buyout occurs before that date you could make a few bucks. Seems a much less risky bet at this point in time than staying long, given there's a good chance the shares will continue to slide downwards. Nobody likes or trusts Mark Thompson anymore.... as he continues to draw his $9 million salary until the coffers are empty.     

[colt451]

Using your math: 5000 shares would cost $6000.  Buyout at $10/share would = 42% premium which is probably really the best a distressed buyout offer would look like.  10% ROI on 5000 shares would equal $5000, while the cost of buying the calls equals $6000 = so your at a ~$1000 loss. You would need a buyout above $10.5 to be in the money.  Not exactly great odds where we are at

[argentia77]

Colt:  Here's another way to look at the math. Suppose I'm long 5000 shares. I sell all my shares at today's closing price of $9.28 and receive 5000 x $9.28 = $46,400. I then buy 5000 call options that expire Apr 21, 2017 with a $10 strike for $1.95/share at a total cost of $9,750 (plus brokerage fees). That leaves me with $46,400 - $9,700 = $36,700 in cash + the 5000 call

[heavyvolume]

That's a good strategy only if you are bullish on the long term prospects!? After looking at a number of past companies, I fear that your $10 strike price might be very optimistic considering this has a good chance of being worthless if the forensics reveal the debt and liabilities are higher than the declining assets. And this company continues to be pounded on from all sides as most

[colt451]

Nice to see the clown show is still going strong. CXR has $145M in cash and will add $100M in positive cash flow in 2H plus has $59M on a revolver to draw down. The Cinven payment is $190M with 8% interest on the 50% deferred beginning on November 1st...ah let me guess math is hard for you?  No worries, keep at it kid. 

[heavyvolume]

Please stop the childish personal attacks. It's a little sad you need to be reducing the quality of discussions and making yourself look bad in public. https://www.prnewswire.com/news-releases/concordia-healthcare-announces-launch-of-first-pipeline-product-and-positive-amendment-to-earn-out-terms-of-amco-agreement-552995211.html "Concordia also announced today that it has entered into

[colt451]

The Cinven earnout is $144 GBP which at the time of PR traded significantly higher, the maximum payout now is approximately $190-$195M dependant on minor currency fluctuations. They currently have $145M cash + $59M on their revolver + free cash flow of $50M/quarter meaning that at the end of September total liquidity =$254M. They can pay the earnout if they wish. Alternatively if the Co does not

[LaticelnExile]

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[colt451]

Haha did you actually just divide the debt by $200M to say it would take 15 years to pay down the debt. WOW, that message is going on the board at work Lettuce - great analysis.

[LaticelnExile]

This post has been removed in accordance with Community Policy

[colt451]

Only 30 actually - I'm referring to you guys as kids because of how idiotic you sound on here. It isn't an assumption that CXR can defer the payment it is a fact. The 8% would only equal $4M which is couch change for CXR. Free cash flow necessary means monies after interest and the principal payment is made but I guess you don't know that. Incredibly sad that you keep posting on here

[LaticelnExile]

This post has been removed in accordance with Community Policy

[greatplay]

October 21 is not enough time; Go for 2+ months; $9 or $10 bids It has better chance - 2 things: 1) Company reports in November a week before options expiration 2) Elections also is on November 8 Options are dumb cheap if we take high violoatility from $7 to $100+ range; represent 15 times; 1500%;  200% is more likely, because just over 1 month ago it was more than 200% difference from

[oexel]

Yah, I bought the Oct$10C for 0.70.  No way I'm averaging down more on this dog.