cmlber Posted November 1, 2015 Share Posted November 1, 2015 What's VRX worth if it liquidated tomorrow? Probably a lot less than the current share price. Their assets are more valuable under the current structure than sold off in pieces. Unless it was liquidated through a sale to another big pharma company that is currently in a high tax domicile and could benefit from a relocation and see the value in VRX pipeline. There are a few of those that would be willing buyers. Link to comment Share on other sites More sharing options...
Picasso Posted November 1, 2015 Share Posted November 1, 2015 You have to sell everything as a platform, not the pieces to get the proper value. The TEV is still $62 billion even after this market drop. Link to comment Share on other sites More sharing options...
original mungerville Posted November 1, 2015 Share Posted November 1, 2015 Pfizer is merging with Allergan for a reason: tax. Link to comment Share on other sites More sharing options...
Picasso Posted November 1, 2015 Share Posted November 1, 2015 Yeah but Allergan has no debt, they sold off their generics business, they don't juice their numbers with this specialty drug nonsense, and they were going to hit $25 of cash EPS in 2017 despite playing it safe. It's really night and day between the two at this point. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted November 1, 2015 Share Posted November 1, 2015 On July 21, Davenport and three other Philidor executives arrived unannounced in Camarillo, talking to Reitz for just 15 minutes before rushing off. Reitz said the executives answered none of his key questions. The next day Reitz's lawyer sent a letter to Philidor. "Your continued silence indicates to us that Mr. Reitz' suspicions are well-founded," he wrote. "You appear to be engaging in a widespread fraud." By then Reitz had stopped sending Philidor the millions of dollars in checks that he was receiving from insurers for prescription shipments. His lawyer explained that Reitz had to protect himself from "massive potential" liability. On Sept. 4, the drug giant Valeant sent a letter to Reitz — demanding $69 million that it said the small-town pharmacist owed. http://www.latimes.com/business/la-fi-1101-valeant-pharmacy-20151101-story.html So the thing is... it's quite possible that the only purpose of the Valeant demand for the $69 million is to begin a campaign of actions that give the appearance that it was unaware of any wrongdoing. Why would we draw attention to knowledge of a fraud by acting anything but unaware? Instead they could have investigated and just sat down with Reitz to hear about the fraud. Then they could have pulled the plug on Philidor at that point instead of waiting to last week after all the business partners had fled. So the demand for the $69 million from R&O... it seems to me like a strategy to establish plausible deniability defense. More musings from a worried girlfriend... Link to comment Share on other sites More sharing options...
ERICOPOLY Posted November 1, 2015 Share Posted November 1, 2015 Somebody asked a while back if I still had a position in VRX. No, I sold out on Friday for a loss and I mentioned it -- but it's buried too deep in the thread. Link to comment Share on other sites More sharing options...
Picasso Posted November 1, 2015 Share Posted November 1, 2015 I think the more simple explanation is that Valeant didn't expect this much attention to a very small dispute out in California. It didn't even have Valeant's name on it, only a letter from their general counsel. The short sellers were looking for anything and they found that small mistake. This isn't the first time Valeant made a really bad judgement involving a small dollar figure. They bought Marathon assets for $286 million while it was under massive scrutiny from hospitals and members of congress. Valeant knew they could make a decent cash return but completely failed to realize what damage it could do to the rest of their business. Link to comment Share on other sites More sharing options...
scorpioncapital Posted November 1, 2015 Share Posted November 1, 2015 Unchecked GREED. That's the reason behind all their moves. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted November 1, 2015 Share Posted November 1, 2015 I think the more simple explanation is that Valeant didn't expect this much attention to a very small dispute out in California. It didn't even have Valeant's name on it, only a letter from their general counsel. The short sellers were looking for anything and they found that small mistake. "The reason why I've stopped sending you checks is because I think you are engaged in massive fraud and I can't associate myself with that." So the reasonable response to that is to demand payment from R&O, ignoring the fraud accusations? Or is the problem that Reitz sent the letter to Philador, Philador burned the letter and is just hoping that Reitz won't escalate the issue in the press when pushed? Remember Valeant only last week thought it wise to have a special investigation into Philador. Link to comment Share on other sites More sharing options...
Picasso Posted November 1, 2015 Share Posted November 1, 2015 Philidor simply told Valeant that one of their pharmacies wasn't paying. Valeant sent a letter to R&O demanding payment and then they got the response from Reitz about suspicions of fraud. Remember the fraud that R&O/Reitz is trying to protect himself from is the improper use of his pharmacy licenses. He knows they shipped out Valeant products he just never dealt with them directly. That money is still owed to Valeant. Now, also think about this. How bad would it look if Valeant decided to let R&O keep the $20 million? That basically admits they knew there was wrongdoing. They had no choice but to pursue legal action even though it would bring down the house. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted November 1, 2015 Share Posted November 1, 2015 Philidor simply told Valeant that one of their pharmacies wasn't paying. Valeant sent a letter to R&O demanding payment and then they got the response from Reitz about suspicions of fraud. So on the conference call to investors that's when they said that the reason why R&O wasn't paying is because of R&O's fraud suspicions and we've been investigating these serious allegations just a standard collections dispute. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted November 1, 2015 Share Posted November 1, 2015 So now the running joke is going to be that, at Valeant, nonpayment for fraud is just "standard". Link to comment Share on other sites More sharing options...
Picasso Posted November 1, 2015 Share Posted November 1, 2015 If Valeant didn't know what was going on earlier in the year, they knew when they had the dispute with R&O. That's probably a material thing when you're being accused of fraud in one of your big growth drivers in an entity you essentially own. They really had no choice but to pursue legal action and hope it didn't get noticed. Otherwise they would need to bribe Reitz with the $20 million, hope the guy doesn't take it to the regulators in fear of losing his license or being complicit with that kind of fraud (by fraud, improper use of his license to make $20 million or whatever Valeant let him keep). it's a tough decision to make if you're Pearson. But it becomes clear that he should have immediately thrown Philidor under the bus once the R&O suit came out. It would have at least looked like he wouldn't stand for anything unethical. Link to comment Share on other sites More sharing options...
Picasso Posted November 1, 2015 Share Posted November 1, 2015 So now the running joke is going to be that, at Valeant, nonpayment for fraud is just "standard". They probably thought it was a standard collections dispute at the very beginning. I have no idea why they still thought it was a standard collections dispute by the time we got that Monday conference call. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted November 1, 2015 Share Posted November 1, 2015 So now the running joke is going to be that, at Valeant, nonpayment for fraud is just "standard". They probably thought it was a standard collections dispute at the very beginning. I have no idea why they still thought it was a standard collections dispute by the time we got that Monday conference call. I didn't buy the stock until after I saw his presentation calling it a standard collections dispute. I want that liar fired. Link to comment Share on other sites More sharing options...
Guest Grey512 Posted November 1, 2015 Share Posted November 1, 2015 Ackman, Sequoia & (at times) the posts in this thread = http://static.fjcdn.com/pictures/Stages_22b114_1173459.jpg Link to comment Share on other sites More sharing options...
Picasso Posted November 1, 2015 Share Posted November 1, 2015 Yeah I would say the R&O dispute is anything but standard. You have to look at everything Pearson did under the idea of creating "maximum shareholder value." It's easy to see why they conduct their business is a particular fashion. In many cases it's penny wise pound foolish. What I would worry about as a shareholder is the pressure this puts on the board keeping Pearson as CEO. They literally just raised guidance for 2015 a couple weeks ago and now it's looking like there's almost no way for them to get close to 2016 guidance. One analyst tried asking what the impact would be to 2016 EBITA and he was silenced by investor relations and Pearson didn't even answer the question properly. Actually the two questions by the analyst were probably the best ones during the entire Q&A: Doug Miehm - RBC Capital Markets Thank you. Couple questions as well. Number one, with respect to patient access and foundations, maybe you could walk us through how many foundations you fund. And of those foundations what proportion of their annual operating budget would you provide to them? The second one just has to do with, if you were to split out the US neuro business, can you give us a sense of what EPS contribution or EBITDA contribution that business would have? And I'll leave it there. Laurie Little - Head of IR Hey guys, why don't you just concentrate just a couple right now. We are trying to get through everybody so why don't we answer the - Mike Pearson - Chairman and CEO Yes, pick your two favorite. Douglas Miehm Just the foundations, just elaborate on that. Mike Pearson - Chairman and CEO Okay. So it is -- I don't have the price number but it's like four or five and so its small number. We make sure as we mentioned that they have other companies are also contributing or other organizations, so these are also contributing, we do not want to be the only one to contribute. Again, we just given the money and they do what they want to with that money. And I don't have -- I don't want to give you a price figure in terms of what percent of our funding, I don't have that and I don't want to guess. Next question? So the stock is getting killed and you don't have time to answer a couple questions? Maybe there's a simple explanation like they have better things to do, but the optics look bad. There's just a lot of this kind of stuff when you look at the past year. Maybe Valeant can buy Theranos for a billion and we'll get two businesses that pick and choose what they want to disclose and questions they want to answer. If a long is hoping Pearson gets fired and ValueAct fixes up the company, how exactly is that supposed to play out? Half the shareholders are in Valeant because of Pearson. You go from an "Outsider" company to a collection of businesses with no more fat to cut and a nasty mess to clean up. Any guidance goes completely out the window. The worse this looks and if any of it reflects directly back to Pearson, the higher the likelihood of losing support from the board. I also find it somewhat strange that we have not heard a peep from ValueAct. Even with Morfit back on board, he didn't even give a typical statement of support behind Pearson or the company. It's like he's also refraining judgement until he finds out exactly what went on at Philidor. Link to comment Share on other sites More sharing options...
Picasso Posted November 1, 2015 Share Posted November 1, 2015 Ackman, Sequoia & (at times) the posts in this thread = http://static.fjcdn.com/pictures/Stages_22b114_1173459.jpg Based on his Friday call, Ackman is still in the denial phase. Wait until some other shoe drops and he loses another 25% on the positions, then we'll see anger. Maybe another open letter to replace Pearson (like with JCP) when the board ignores his screaming, that would be the bargaining. But Ackman claims to avoid depression and he would just skip straight to accepting the loss. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted November 1, 2015 Share Posted November 1, 2015 If a long is hoping Pearson gets fired and ValueAct fixes up the company, how exactly is that supposed to play out? Half the shareholders are in Valeant because of Pearson. They are in it for the Pearson that says this: “Operating honestly and ethically is our first priority, and you have my absolute commitment that we will make it right.” Not the one that says this: "standard collections dispute" while still maintaining that Philador was "immaterial". Dude, like you're partnering your shareholders with a company that you know has been accused of "widespread fraud" by one of it's owned pharmacies (R&O), and you still maintain that it's immaterial. Then when outed and forced to disclose it, you still characterize it as a "standard collections dispute". "You're just a fucking dirtbag is all" is what I'd like to say to Pearson. Handcuffs might make my loss a bit less painful. Link to comment Share on other sites More sharing options...
ATLValue Posted November 1, 2015 Share Posted November 1, 2015 So is the LA TIMES article what Citron was saying they were going to release Monday or do you guys think there is incremental to that article... Link to comment Share on other sites More sharing options...
Hielko Posted November 1, 2015 Share Posted November 1, 2015 Or something related to this: http://theskeptic21.blogspot.nl/2015/11/valeant-needs-more-cowbell.html Link to comment Share on other sites More sharing options...
feynmanresearch Posted November 1, 2015 Share Posted November 1, 2015 Or something related to this: http://theskeptic21.blogspot.nl/2015/11/valeant-needs-more-cowbell.html Popcorn time baby! Link to comment Share on other sites More sharing options...
gary17 Posted November 1, 2015 Share Posted November 1, 2015 I'm tempted now to initiate a short sell ... Link to comment Share on other sites More sharing options...
ATLValue Posted November 1, 2015 Share Posted November 1, 2015 same Link to comment Share on other sites More sharing options...
elevensecsrt4 Posted November 1, 2015 Share Posted November 1, 2015 Hey Picasso, Are you or were you long VRX? Link to comment Share on other sites More sharing options...
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