Monday, September 1, 2014

Hempton on Valeant Pharmaceuticals $VRX

Here's a comment on one of Hempton's blog posts about Valeant Pharmaceuticals.

"For 2Q14, they excluded the injectable business in their growth calculation. Why would you exclude that, when the sale was completed on July 10th or AFTER the end of 2Q? HA, it's because if you don't exclude it, the actual organic PF growth and same store growth would have been 6% and flat, respectively, compared to the 8% and 4% they reported. And this is on their numbers.

If you read the footnote on their organic growth, it's almost comical. They exclude "assets held for sale". So anytime a business underperforms, cue facial injectables tanking 40%, it gets classified to asset held for sale and becomes excluded from growth calculation. Can't say they are not clever."
I haven't verified what this commenter is saying, but I'd be hesitant to ever buy anything that Hempton is short.



"Switzerland is one of those small countries of Europe, the existence of which makes a lot more sense when you consider that the alternative would have been for one Empire to let another have control of the territory. If you want to know what I mean, consider a map of the stretch of North Sea coast stretching up from Normandy in the direction of the Baltic and ask yourself why it is that such a huge country as Germany only has a scant few dozen miles of coastline and only two or three usable ports. What is it, the man wondered, about small, independent, trade-oriented countries like Denmark and the Netherlands that has made France, Sweden and Britain so keen on protecting their independence? To ask the question is to answer it"

Thursday, August 28, 2014

"BTIG Comments on Situation at RadioShack Corp." $RSH


Analyst William Frohnhoefer of BTIG said he "struggles to see any fundamental reason for the stock move absent a palpable term sheet."

Tuesday, August 26, 2014

Best Buy Comments on Earnings Call Sound Bearish For RadioShack $BBY $RSH


Now looking forward to the back half, as Hubert remarked earlier, industry wide sales are continuing to decline in many of the consumer electronics categories in which we compete. We are also seeing ongoing softness in the mobile phone category ahead of highly anticipated new product launches. Therefore absent any changes in these declining industry trends and with limited visibility to new product launch quantities, we continue to expect comparable sales to decline in the low single digits in both the third and fourth quarter. From an operating income rate perspective in the back half, we are expecting the following business drivers versus last year. One, a similar promotional competitive environment but with better promotional effectiveness internally; two, a greater mix of online revenue that will put pressure on the overall operating income rate; three, continued industry softness and higher promotionality in Canada and China...

Q & A: This is really the first time you have given definitive guidance on your comp outlook for the all-important fourth quarter and you are now saying it will be down low single digits. Where does this number really compare to where your plan was at the beginning of the year and what really has changed if anything in terms of your guidance on the comp for Q4 specifically?

Alan, we certainly believed that early in the year that we would see less softness in those NPD categories. We also were more optimistic about the innovation in mobile and after last year having the Samsung Galaxy other things came out, we had a few exciting things last year. But the fact that the innovation in mobile has been pretty soft this year was different than we had hoped. Now the good news is that we have remained very conservative and you know us. We don't live on our wishes and hopes here. We live on what the data says. So based on the industry data around these categories, it still does not paint a positive picture. If you look at the people who write about this industry, even with a highly anticipated phone, not speaking to any one vendor but one highly anticipated phone launch, the saturation in the mobile phone category makes this complicated to forecast. We think it is exciting and we think the installment billing programs which by the way Hubert also called out, we are seeing an acceleration in that and it is very fast. The disruption of the carriers could be a dynamic that we did not anticipate. What is happening with the carrier plans right now which you are observing I'm sure, we did not anticipate. Now again until we see what that means, we are not going to put that into a forecast. We are looking at economic data just like you, our consumer trending data and this is what it is showing. Now that is the same data I might add that told us to tell you last quarter that Q2 would be negative low single-digit comps which is exactly where we ended up and we still in those NPD categories gained share. So that is what we are using. Could it be better? Yes. Is the acceleration of Ultra High Definition TV happening? There is no question about it.
Comment from an analyst: "If Best Buy’s top line is hurting, particularly in the mobile business, that portends incredibly poorly for RadioShack."

"Aurelius Said to Double NII Stake as Bankruptcy Path Is Readied" $NIHD

Bloomberg article

Aurelius Capital Management LP doubled its stake in some NII Holdings Inc. bonds to more than $500 million, seeking to gain a leading position among creditors as the mobile-phone carrier heads toward a possible bankruptcy, according to a person with knowledge of the matter. The distressed-debt investor that’s been labeled a 'vulture' by the government of Argentina bought more of NII's $500 milion of 8.875 percent bonds due 2019 and $800 million of 10 percent securities due 2016...

Aurelius and Capital Group Cos. plan to hold talks next week to decide how to split ownership of NII, paving the way for a possible pre-arranged bankruptcy plan, according to the person.

Winning Bid At James River Coal Auction Was $52 Million $JRCC

From 8-K filing:

Pursuant to the Strategic Transaction Bidding Procedures, the Debtors, in consultation with the agent under the Debtors’ debtor-in-possession financing facility (the “DIP Agent”) and the Unsecured Creditors’ Committee, entered into an Asset Purchase Agreement, dated August 15, 2014 (the “Agreement”) with, JR Acquisition, LLC, a wholly owned subsidiary of Blackhawk Mining LLC (together with JR Acquisition, LLC, “Blackhawk”), and selected the Agreement to serve as a Stalking Horse Bidder for the purchase of the Debtors’ mining complexes commonly referred to as the Hampden Complex (including the assets of Debtor Logan & Kanawha Coal Company, LLC), the Hazard Complex (other than the assets of Debtor Laurel Mountain Resources LLC) and the Triad Complex (collectively, the “Purchased Assets”). The Agreement contemplated that, among other things, Blackhawk would (i) pay to the Debtors $20.0 million in cash and deliver a third lien secured promissory note in the amount of $25.0 million, and (ii) deliver to one of the Debtors’ lessors, in lieu of a cash payment of cure costs under leases to be assumed and assigned to Blackhawk, a second lien secured promissory note in the amount of $5.0 million. A copy of the Agreement is filed herewith as Exhibit 2.1 and is incorporated by reference herein.

In conjunction with the Strategic Transaction Bidding Procedures, the Debtors filed with the Court the Agreement with Blackhawk and then held a previously announced public auction on August 18-21, 2014 to determine whether a higher or better bid (or combination of bids) could be obtained. During the auction process, Blackhawk submitted a bid that, among other things, increased the consideration offered for the Purchased Assets from $50 million plus the assumption of certain liabilities to $52 million plus the assumption of certain liabilities.

On August 21, 2014, the Debtors, in consultation with the DIP Agent and the Unsecured Creditors’ Committee, selected Blackhawk’s revised bid as the winning bid. The revised bid contemplates that Blackhawk will (i) pay to the Debtors $20.0 million in cash and deliver a third lien secured promissory note in the amount of $27.0 million, and (ii) deliver to one of the Debtors’ lessors, in lieu of a cash payment of cure costs under leases to be assumed and assigned to Blackhawk, a second lien secured promissory note in the amount of $5.0 million. The Company will file an amendment to the Agreement reflecting the revised bid in a Current Report on Form 8-K within four business days of the date of the amendment.

The sale is expected to close on or about August 29, 2014 and is subject to customary closing conditions, including Court approval. A Court hearing is scheduled for August 26, 2014 to consider approval of the sale.
It looks as though the sale was approved at the hearing today, judging by the docket entry.

"RadioShack shareholder negotiating rescue package" $RSH

Vague story:

"RadioShack Corp's second-largest shareholder, Standard General LP, is negotiating a rescue package with investors to help the consumer electronics retailer ward off bankruptcy, Bloomberg reported, citing people with knowledge of the matter.

Standard General is seeking to strengthen RadioShack's cash flow by issuing debt or equity, Bloomberg said."