Author Topic: MNK - Mallinckrodt  (Read 12035 times)

Stuart D

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Re: MNK - Mallinckrodt
« Reply #10 on: August 30, 2019, 01:29:31 PM »
I know the litigation is extremely negative, but it seems like they still have options before the $700m bonds mature:

- If the bonds are trading at 50, they could start buying back large chunks now;
- They own 11 facilities across the U.S., Canada, Ireland and Japan totaling ~2.3 million square feet. They could sell some facilities, or pursue sale and lease-backs;
- They have $500m in receivables. They could use factor financing if the company gets desperate closer to the maturity date; and finally
- They still have 6+ months to cut back on CapEx and generate FCF.
« Last Edit: August 30, 2019, 10:36:26 PM by Stuart D »



Gregmal

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Re: MNK - Mallinckrodt
« Reply #12 on: September 04, 2019, 03:54:14 PM »
I'd been looking at this space, and the big 3(TEVA, MNK, ENDP) and last Friday decided to buy a little ENDP and TEVA for shits. As much as I wanted to buy MNK, its just such a garbage company riddled with self inflicted wounds, horrible acquisitions, and questionable offerings. I think Endo probably ends up a 0 as well, although Par IMO is potentially worth as much as all of the current EV. Obviously this isn't including any opioid related liability. Which I still can't really handicap, because Im not quite sure what these companies did wrong here? Market their product? If anything people should be suing the FDA...

roark33

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Re: MNK - Mallinckrodt
« Reply #13 on: September 04, 2019, 06:18:43 PM »
Stock down 50% in after hours, this company is probably going to file for bankruptcy before this thread hits 20 messages. 

Stuart D

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Re: MNK - Mallinckrodt
« Reply #14 on: September 04, 2019, 11:09:10 PM »
Im not quite sure what these companies did wrong here? Market their product? If anything people should be suing the FDA...

^good point. I hadn't thought of it like that before.

Stuart D

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Re: MNK - Mallinckrodt
« Reply #15 on: September 04, 2019, 11:37:38 PM »
Stock down 50% in after hours, this company is probably going to file for bankruptcy before this thread hits 20 messages.

^It's falling so quickly!

Just a thought... if the probability of bankruptcy is 90%, at what price is the equity worth it? e.g. Market cap = $10m?
If the equity survives & you got in at $10m it's a potential 100-bagger.


UK

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Re: MNK - Mallinckrodt
« Reply #16 on: September 05, 2019, 12:41:36 AM »
I'd been looking at this space, and the big 3(TEVA, MNK, ENDP) and last Friday decided to buy a little ENDP and TEVA for shits. As much as I wanted to buy MNK, its just such a garbage company riddled with self inflicted wounds, horrible acquisitions, and questionable offerings. I think Endo probably ends up a 0 as well, although Par IMO is potentially worth as much as all of the current EV. Obviously this isn't including any opioid related liability. Which I still can't really handicap, because Im not quite sure what these companies did wrong here? Market their product? If anything people should be suing the FDA...

If opioids was the only problem to figure out, than maybe ENDP but especially TEVA would be very interesting. But I am not sure what to think about their generic part of the businesses. I remember years ago generics traded at the premium (growing new market etc), but it seems this business never lived up to the expectations and in the last 2-3 years its economics resembles more oil&gas or shipping, than some kind of sustainable competitive low cost manufacturing. Maybe this is/will change, but I just have no idea how to handicap this question?

scorpioncapital

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Re: MNK - Mallinckrodt
« Reply #17 on: September 05, 2019, 12:49:26 AM »
I think MYL is a safer bet. And their merger with Upjohn I think it's cheap but less distressed than TEVA.

Gregmal

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Re: MNK - Mallinckrodt
« Reply #18 on: September 05, 2019, 05:30:43 AM »
I'd been looking at this space, and the big 3(TEVA, MNK, ENDP) and last Friday decided to buy a little ENDP and TEVA for shits. As much as I wanted to buy MNK, its just such a garbage company riddled with self inflicted wounds, horrible acquisitions, and questionable offerings. I think Endo probably ends up a 0 as well, although Par IMO is potentially worth as much as all of the current EV. Obviously this isn't including any opioid related liability. Which I still can't really handicap, because Im not quite sure what these companies did wrong here? Market their product? If anything people should be suing the FDA...

If opioids was the only problem to figure out, than maybe ENDP but especially TEVA would be very interesting. But I am not sure what to think about their generic part of the businesses. I remember years ago generics traded at the premium (growing new market etc), but it seems this business never lived up to the expectations and in the last 2-3 years its economics resembles more oil&gas or shipping, than some kind of sustainable competitive low cost manufacturing. Maybe this is/will change, but I just have no idea how to handicap this question?

Yea I honestly don't know. Much of the sector has just been flipped upside down the last few years. Were the valuations prior reasonable? Or is the system really broken and therefor the entire universe of players needs to be reset? When an entire sector gets bombed Ive always found it prudent to start sniffing around. A bunch of these companies have lost like 80% of their value in a couple months. Largely for issues relating to the entire field. I've started looking around at a bunch of companies but that's really the million dollar question. VRX was just the big noise maker, but structurally many of these companies operated similarly, with huge leverage and stale portfolios of products.

Regarding opioid issues, outside of what Ive already said above, you'd also have to think that if the objective is to get large settlements, there would be a noted effort to seek resolution that didn't involve bankrupting companies....MNK can be the headline "we took a hardline and Bk'd one of the bad guys" sacrificial lamb, but if all of them follow suit no one will get any money.

Spekulatius

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Re: MNK - Mallinckrodt
« Reply #19 on: September 05, 2019, 06:45:02 PM »
I donít see how MNK, TEVA and others involved in this can avoid bankruptcy. When you look at the verdict against  JNJ, which didnít  even have a meaningful market share, it is clear that the weakly capitalized companies which have orders of magnitude larger exposure are probably getting restructured :
https://finance.yahoo.com/news/johnson-johnson-apos-opioid-case-222826349.html

FWIW, I owned a good sized position in MCK but sold it recently because I canít handicap the exposure.
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