tag:blogger.com,1999:blog-4815867514277794362.post1242681025310991544..comments2024-03-08T06:18:28.125+11:00Comments on Bronte Capital: Comments on the blockbuster Valeant conference callJohn Hemptonhttp://www.blogger.com/profile/03766274392122783128noreply@blogger.comBlogger72125tag:blogger.com,1999:blog-4815867514277794362.post-73532389932918986032016-04-12T06:54:22.043+10:002016-04-12T06:54:22.043+10:00I think you can add another pharmacy to this - GEN...I think you can add another pharmacy to this - GENRX (Benzepro Creamy Wash 7% - I just called and they told me that the pre-insurance price is over $700 - for a bottle of Benzoyl Peroxide wash). <br /><br />This is the fourth "specialized" prescription I've gotten from this particular Dermatologist and the third specialized pharmacy - none accepted my govt insurance, and while my doctors indicated that they would be very low cost or free - they were ridiculously overpriced. I have been able to use ExpressScripts instead for them, and apparently someone is still paying full price or negotiating because they are not generic and the copays are still higher than they should be. <br /><br />Of note that my daughter has the same dermatologist, and different insurance - and her prescriptions were filled locally with employer-sponsored insurance at a lower copay - and they were generics.<br /><br />How complicit are the Dermatologists and their medical systems in this whole thing? Why are they driving it? What do they get?<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-46793575774142291132015-11-11T01:53:41.878+11:002015-11-11T01:53:41.878+11:00I covered my short puts on VRX at a $3 profit toda...I covered my short puts on VRX at a $3 profit today. just so that the trolls don't say I'm full of it laterGlobalTraderhttps://www.blogger.com/profile/01717693276747483404noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-27773357130286262682015-11-11T00:54:50.691+11:002015-11-11T00:54:50.691+11:00For your amusement: http://www.valeant.com/Portals...For your amusement: http://www.valeant.com/Portals/25/PDF/151108%20Rebuttal.pdf<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-59253117809276571592015-11-10T10:00:58.719+11:002015-11-10T10:00:58.719+11:00I live in Australia. It was time-stamped Sydney ti...I live in Australia. It was time-stamped Sydney time.<br /><br />I guess I should go to the beach now. <br /><br />J<br /><br />PS. It is the future here.John Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-73454724740942341322015-11-10T09:49:41.745+11:002015-11-10T09:49:41.745+11:00You claim accuracy is important but publish an art...You claim accuracy is important but publish an article on Monday and timestamp it Tuesday...?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-46172229189768319142015-11-09T01:46:17.093+11:002015-11-09T01:46:17.093+11:00Calvert,
Are you talking about the "whistleb...Calvert,<br /><br />Are you talking about the "whistleblower X" PDF? It was trash. Innuendo without actually connecting any dots.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-27555846726867464602015-11-08T12:36:17.405+11:002015-11-08T12:36:17.405+11:00If you want to understand the accounting and poten...If you want to understand the accounting and potential for "error", I have one name for you - PDL biopharmaAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-84167778632480667702015-11-08T02:13:53.676+11:002015-11-08T02:13:53.676+11:00"He is a forced seller (margin call) if VRX d..."He is a forced seller (margin call) if VRX drops much more."<br /><br />Good call.<br /><br />"And even if I did no hedging and rode VRX from $100 down to $80 (which is not true), how is that worse than hemptom"<br /><br />The issue under discussion is VRX, not your alleged genius stock market outperformance relative to others.<br /><br />"I see three possible outcomes - 1) Pearson gets fired 2) Pearson tries to hang on or 3) Pearson is inseparable from Valeant because if he leaves, the extent of what we will find will be catastrophic for the company."<br /><br />I don't think any of those options change the ultimate outcome. #3 speeds it along, and may be necessary to partially untarnish board member names. This turd is so covered with investigatory flies that the truth will come out at some point. Which 3 letter agency or state AG gets the most credit for uncovering the most unsavory and/or criminal practices and when are the primary issues to consider. If Pearson stays, it will be to delay and obfuscate while cash builds to deal with civil penalties.<br /><br />Someone at Philidor will start to sing when the prosecutors offer deals. It will be interesting to see who ends up serving time. This is the type of case which rockets a prosecutor into the big time (think Rudy Guliani or Chris Christie), so some very smart and ambitious people will be all over Valeant business practices.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-91666023255083144662015-11-08T01:21:44.649+11:002015-11-08T01:21:44.649+11:00What are your thoughts on "the missing piece&...What are your thoughts on "the missing piece" article that came out laying out the involvement of Lazier Kornwasser as an accountant, one hired by Valeant and on the same day Phillador was incorporated in Pennsylvania... This is the same guy that was part of the Medco 2003 scandal years ago... he was not the NAME put to medco, was a big part. Then you have Norma Provencio from Author Anderson... Partner in charge... It lays out there most likely involvement with dates..<br />Ironically Kornwasser was hired in Jan. 13 and on his hire date (Phillador was incorporated in Penn) ... <br />Blatant Fraud will be laid out. The piece tells it all... Can't believe no mention of it here and the basic proof we have. No way this survives and it amazes me that this part of the story is being push aside...I guess it gives all the institues time to unload...<br />Can be no other reason... i have a copy if anyone needs it...Anonymoushttps://www.blogger.com/profile/16452115675321939517noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-49663071161682022412015-11-08T01:12:33.372+11:002015-11-08T01:12:33.372+11:00I read no mention of "the missing piece"...I read no mention of "the missing piece" article that came out tuesday / Wed... Bright conversation on here and would think you guys would know all about Kornwasser, the chair audit and the proof laid out on how kornwasser incorporated Phillador the same day he was hired at Valeant, begininng of 2013... Please take a look... Kind of lays out his performance at Medco...Anonymoushttps://www.blogger.com/profile/16452115675321939517noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-37553874139822492272015-11-07T21:34:30.943+11:002015-11-07T21:34:30.943+11:00This is ridiculous. I gave you a link to a page w...This is ridiculous. I gave you a link to a page which shows the audited results of Amalthea, which is the AUD version of Bronte, since 2013. You can't cherry pick an offhand quote from a story about something else, as if this was a piece of information that was comparable to and capable of refuting the actual data. I am done with you, and rather regret having been polite to you in the past.Dan Daviesnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-33635722377879882912015-11-06T22:38:32.018+11:002015-11-06T22:38:32.018+11:00Dan Davies,
what about this
"The struggles ov...Dan Davies,<br />what about this<br />"The struggles over Valeant and Herbalife may have taken a toll on Hempton's results. He says after some very strong years, Bronte has been generally flat, with some periods of gains and losses, since 2013."<br />http://finance.yahoo.com/news/valeants-crisis-fuels-feud-between-144000889.html?soc_src=mediacontentstory&soc_trk=tw<br /><br />And even if I did no hedging and rode VRX from $100 down to $80 (which is not true), how is that worse than hemptom riding from $120 to $260? he also lost put premiums and paid bond interest. I would assume hempton had to cover some above $200 to keep his position size controlled. Its unclear if he is even up on the investement and if he is, if that gain is anything more than a drop in the bucket. But I don't say this to critize, its a volatile levered company. It doesn't warrant a big position one way or the other GlobalTraderhttps://www.blogger.com/profile/01717693276747483404noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-42368045298101022202015-11-06T20:13:07.599+11:002015-11-06T20:13:07.599+11:00He is also up since 2013, which the Hempton invest...<i>He is also up since 2013, which the Hempton investors cant say</i><br /><br />I have literally no idea why someone would try to make such an easily checked false claim. Everything else you've said is now called into question.<br /><br />http://www.brontecapital.com/amalthea_performance.htmlDan Daviesnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-26353129155585916002015-11-06T17:33:20.515+11:002015-11-06T17:33:20.515+11:00From page 36 of the 2015 proxy:
"7) Includes ...From page 36 of the 2015 proxy:<br />"7) Includes 2,028,516 shares which were pledged in connection with loans used to fund tax and other obligations associated with vesting and<br />delivery of equity incentive awards and purchases of Company shares. The pledging of the shares was approved by the Company’s Board<br />of Directors. The amount reported does not include 1,213,435 shares with respect to which Mr. Pearson no longer serves as trustee of the J.<br />Michael Pearson grantor retained annuity trust, of which Mr. Pearson is not the beneficiary and in which he has no pecuniary interest."<br /><br />>> Pearson hasn't reported any share sales.<br />He is a forced seller (margin call) if VRX drops much more.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-82693986886646266542015-11-06T15:33:22.998+11:002015-11-06T15:33:22.998+11:00"If you've shorted VRX with Dec $60 puts,..."If you've shorted VRX with Dec $60 puts, have you not bought puts? Do you mean whoever is selling the puts is a moron?"<br /><br />I shorted the puts. not bought them. GlobalTraderhttps://www.blogger.com/profile/01717693276747483404noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-6949729880175174242015-11-06T15:22:25.013+11:002015-11-06T15:22:25.013+11:00My boss always said "if you try to pick a bot...My boss always said "if you try to pick a bottom, you just end up with crap on your hand" <br /><br />I see three possible outcomes - 1) Pearson gets fired 2) Pearson tries to hang on or 3) Pearson is inseparable from Valeant because if he leaves, the extent of what we will find will be catastrophic for the company. <br /><br />As far as Ackman goes - the problem for him is that he is lending his reputation to Valeant. And what he doesn't yet understand is that this is akin to throwing good money after bad. He might not be able to buy anymore shares, but he is putting his firm (and himself personally) at risk by being a vocal supporter of the company. And what does the company stand for? Higher prices, higher drug spending, not paying taxes, and, as has been reported on, "back doors" around insurance companies. <br /><br />As Ackman knows, the press is powerful tool and eventually they will catch up w/ the reality that Ackman, as one of the owners of Valeant, has been supportive of a strategy that increases drug prices for all Americans, while at the same time trying to avoid taxes. Then it will be Ackman with the "New York Times problem". <br /><br />As far as the accounting goes, look at the gross to net discount Valeant reports in their financing statements. The change from second quarter to third is close to the same size as 20% of total revenues. And don't forget that this is an accounting accrual, based on Valeant's estimates. That is 1) a big change and 2) allows valeant to exercise tremendous control over their reported numbers. <br /><br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-56807604915652145822015-11-06T14:59:33.607+11:002015-11-06T14:59:33.607+11:00But of course, if the stock price starts to fail t...But of course, if the stock price starts to fail to bounce despite the chart being washed out, postive news and a rally that fizzles out. I would have to be an idiot not to hedge/delta hedge. Its only the fundamentals 'only' guys who get killed by these sell-offs. Small players who pay attention to the chart can always bail and get back at any momentGlobalTraderhttps://www.blogger.com/profile/01717693276747483404noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-55455511768159710752015-11-06T09:46:52.279+11:002015-11-06T09:46:52.279+11:00Global Trader,
If you've shorted VRX with De...Global Trader, <br /><br />If you've shorted VRX with Dec $60 puts, have you not bought puts? Do you mean whoever is selling the puts is a moron?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-74404780615416722272015-11-06T09:14:04.585+11:002015-11-06T09:14:04.585+11:00Well, I will be the first to say the Ackman made a...Well, I will be the first to say the Ackman made a mistake in his position size. You just don't put a quarter of your assets in a company levered 5-1. Even if you are right on a market to market basis it will be too much of a hassle, as he is finding out. 25% in KO or indicies yes, in levered companies, no. However, he is still up more than the market by a huge margin and anyone who invested with him (even since his days at Gotham, heck even if you got in Gotham on the last year and them moved to Pershing) cannot complain about his returns. He is also up since 2013, which the Hempton investors cant sayGlobalTraderhttps://www.blogger.com/profile/01717693276747483404noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-4777123234435173702015-11-06T08:43:58.375+11:002015-11-06T08:43:58.375+11:00I'm long through PSH and shorted VRX stock as ...I'm long through PSH and shorted VRX stock as a hedge as the price action told me something bad was going on. Of course, you won't believe me but I don't care. I will unhedge as soon as this capitulation is over. Thats what this is, capitulation. One asset sale and shorts will be scrambling to cover over $90. I did 'add' to the position today, I shorted the Dec $60 put ($5.4 credit), no hedging. Whoever is buying these puts is a moronGlobalTraderhttps://www.blogger.com/profile/01717693276747483404noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-57612563803222827732015-11-06T08:15:53.460+11:002015-11-06T08:15:53.460+11:00There is a saying about catching a falling knife t...<i>There is a saying about catching a falling knife that comes to mind</i><br /><br />My old boss always used to correct this to "catching a falling piano". Because there is, in principle, a chance of catching a knife without being cut. But there's no way to catch a piano without being crushed ...<br /><br />Risk management is an issue here. If Global Trader is right, then Ackman looks like a genius and we all look like cowards. But the undeniable fact is that, win or lose, Ackman has exposed his investors to a large risk of permanent loss of a "high teens" percentage of their capital. If you do that on a regular basis, one day you blow up, with probability one. Even if this turns out to be the single greatest trade of Ackman's already prestigious career, I would still be taking my money away from him.Dan Daviesnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-30266760689910040942015-11-06T04:03:31.195+11:002015-11-06T04:03:31.195+11:00Well no, not every junk rated stock is a short. B...Well no, not every junk rated stock is a short. But not every junk rated stock is so obvious a long that "nobody who analyses securities for a living" would not buy it. It's your degree of certainty that I'm objecting to, and your implication that anyone still short at this price is ignoring the facts.<br /><br />Just by way of conversation, by the way, while we've been having this discussion, the stock which you were unequivocally long at $100, has fallen to $81 plus change. I'm not saying that to make a cheap yah-boo point, but rather to ask - at what level would you stop out? What is it about this stock which makes normal risk management irrelevant? Dan Daviesnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-80733648724466648702015-11-06T02:35:49.212+11:002015-11-06T02:35:49.212+11:00I hope Global Trader bought more at $180, and then...I hope Global Trader bought more at $180, and then at $120, and then even more at $100, and then even more at $90, and then even more here! There is a saying about catching a falling knife that comes to mind...The good news is that it has become a "better buy" the more money you have lost.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-41018369275373297812015-11-06T01:25:02.113+11:002015-11-06T01:25:02.113+11:00Global Trader,
Material chance of being worth zer...Global Trader,<br /><br />Material chance of being worth zero could be 10% (or X%). Which means a 90% (or 1-X%) chance of being worth not zero.<br />You choose the number. Then you choose the value of the case when it is not worth zero. Then you weight the two and you get a "fair value". <br /><br />The problem with companies with lots of debt is that they have additional triggers to get to have the stock worth zero. Lots of famous investors (including Bill Ackman) talk about the case whether they will have 'permanent catastrophic loss'. The question is really whether they will be forced out at zero. The problem for the VAST majority of investors out there is not whether they will suffer permanent catastrophic loss such that their investment goes to zero and never comes back, but whether someone else FEARS it might, and therefore the person bails. The problem is not that the other person bails but that you bail because the other person did. <br /><br />Those who bought Enron at $90 and sold at $10 still kept their $10. <br /><br />Those who bought at $10 because it had fallen 90% lost everything they put into the stock.<br /><br />"This isn't an investment grade credit". Traditionally, the "risk" that a single-B credit gets worse (i.e. CCC or default) is about 3:2 against getting better (from B to BB, or BBB, or better). That means the volatility is HIGH, and therefore the option price (the stock is a call option on the clearing value of the assets vs liabilities being worth more than zero) is worth more than zero. The question is really "how much more than zero?"<br /><br /><br />Travisnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-55976015566961230752015-11-06T01:08:34.023+11:002015-11-06T01:08:34.023+11:00Pearson's SEC filing history: http://edgar.sec...<br />Pearson's SEC filing history: http://edgar.sec.gov/cgi-bin/own-disp?action=getowner&CIK=0001426004<br /><br />12/14/2013 - Pearson owns 4,025,498 shares. http://edgar.sec.gov/Archives/edgar/data/885590/000088559013000101/xslF345X03/primary_doc.xml<br /><br />No sales or other dispositions are reported for the next near and a half.<br /><br />2/26/2015 - Pearson owns 2,812,063 shares http://edgar.sec.gov/Archives/edgar/data/885590/000088559015000017/xslF345X03/primary_doc.xml<br /><br />What happened?<br /><br />The Million Missing VRX Sharesnoreply@blogger.com