Post by
templetooth2 on Sep 25, 2024 1:18pm
Houston, we have a problem
I'm sure that those who follow this company closely already are aware that Q3 will have a scary headline. Myself, I wasn't aware until yesterday what an oversized impact the share price of AIDX has on WELL's quarterly results. Something I read elsewhere from "WolfofOakville" tweaked me to this.
According to him, "For every penny AIDX falls from $2.53 (Q2 close) will decrease Well Health's profitiability by approx $750k."
That comment provoked me to take a look at the Q2 income statement. Silly me, I hadn't done so previously.
Just to review: in Q2 WELL reported net income of $116,976,000. The overwhelming majority of that came from change in fair value of investments in the amount of $116,327,000. Without AIDX's rise in price, WELL would have had a profit of some $650,000.
WELL has a mix of AIDX convertible debs, warrants and call options. Until somebody shows me differently, I will assume that Wolf's numbers are correct. If AIDX is valued at today's $1.35 the result is a "loss" of $88,500,000 from Q2's "gain" of $116 million. The impact on Q3 and 9 month results is going to focus attention on just what the true margins are, and things like how much money is consumed by G & A expenses - $75.5 million in Q2.
Each to his/her own, but thanks to that insight, I am temporarily out. I don't want to be a shareholder when this news hits at the peak of tax loss selling season.
Comment by
Jonathan2022 on Sep 25, 2024 9:17pm
This feels like a nothingburger. Analyst expectations are based on adjusted net income which adjusts out unrealized gains or losses such as the ones that occured in Q2 or will occur at the end of Q3 related with AIDX stock. It would be very different if these were realized gains or losses as they would not be adjusted out.