|Shares Out. (in M):||51||P/E||0||0|
|Market Cap (in $M):||1,403||P/FCF||0||0|
|Net Debt (in $M):||3,128||EBIT||0||0|
|Borrow Cost:||Available 0-15% cost|
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Please note that while the name is the same, it is a completely new thesis and new pitch, all thanks to Brexit, which was unexpected!
CXRX is an even better short now as blood is in the water and what comes next should be a big step down in the share price.
The prior thesis posted on VIC showed the shady business model of CXRX's UK business, which the BIGGEST business for CXRX (~60% of sales).
The thesis now is that with UK uncertainty, the likelihood of a buyout occuring (which is what kept the stock artificially high) is no longer valid. The likelihood of Apollo, the only remaining publicly rumored party, will be hard-pressed to gain clarity and buy a company with a business model that is shady within a highly uncertain geopolitical backdrop.
To that end, the next step down will be when CXRX discloses that they will strategically be best served to stay a standalone company. We want the market to value CXRX on its fundamentals, not on buyout rumors. When the buyout offer is taken off the taken and the markets focus on its fundamentals (N. America: 40% of sales is imploding; UK business will now be imploding as well with Brexit AND its fundamental business model may be in serious trouble--any regulatory governmental actions would be icing on the cake; refer to prior writeup on what that may look like), the stock will be close to a $0 because its equity will be crushed by its high debt (6x: I'm not kidding)!
Brexit -> no buyers of CXRX -> markets focusing on CXRX's high debt (6x) and imploding fundamental business -> $0 equity valuation
|Entry||07/12/2016 09:34 AM|