Author Archives: Inelegant Investor
Teva Pharmaceuticals(TEVA), the world’s largest producer of generic drugs, is in turmoil. Last week, the company lost a key patent ruling regarding its blockbuster drug, Copaxone. Copaxone, which can maintain remission for multiple sclerosis patients, accounts for one-fifth of Teva’s revenue. The introduction of generic competition, which now seems likely, will result in a major drop in revenue… Read More »
Last week, Biogen(BIIB) completed its spinoff of Bioverativ(BIVV). The Bioverativ spinoff included Biogen’s hemophilia assets and a $325 million pile of cash. What remains at Biogen is, depending on who you listen to, either poised for great growth, or struggling with it. Barrons reports on two analysts with positive views on Biogen: RBC Capital Markets analyst Michael Yee… Read More »
Bioverativ(BIVV), a drug company focused on hemophilia and other blood disorders, was spun off by Biogen(BIIB) last week. Gabelli & Co initiated Bivoerativ stock as a buy with a value of $58, citing the company’s strong balance sheet(no debt, $325 million in cash), its limited exposure to Medicare, its potential to benefit from corporate tax reform, and its… Read More »
As we discussed back in November 2015, Starboard Value Partners, led by the brash Jeffrey Smith, had acquired a stake in Macy’s(M) and pushed for a spinoff of the real estate into a REIT(Real Estate Investment Trust). Now, with the stock down 60% from Starboard’s purchase price and longtime Macy’s CEO Terry Lundgren stepping down, the plan may… Read More »
Last March, we reported that CBS(CBS) was considering ‘strategic options’ for its radio business. After it was unable to find a buyer, the company moved forward with plans for an IPO and spinoff of CBS Radio. Today, the company again announced a change of plans. Instead of an IPO, the company will be spun off and immediately merge… Read More »
On February 1, Biogen(BIIB) completed the spinoff of its Hemophilia business, Bioverativ(BIVV). Biogen shareholders woke up on February 2 to find one share of Bioverativ in their portfolio for every two shares of Biogen that they had owned. Biogen has had a tumultuous year, with the departure of its longtime CEO George Scangos in January amidst stalling sales. Xconomy’s… Read More »
In June 2015, when we wrote about Graham Holdings(GHC) spinning off Katherine Graham’s “best acquisition ever”, we noted that Cable One(CABO), then trading at $430, would make an interesting acquisition target as one of the few smaller independent public companies. Instead, Cable One, now trading at $639, is purchasing a smaller competitor, NewWave Communications, for $735 million in… Read More »
Citrix Systems(CTXS) is finally letting go of GetGo. The company first announced plans for the spinoff of its GetGo division in November 2015. Last July, an agreement was reached with LogMeIn(LOGM) to merge with GetGo immediately post spin off in a Reverse Morris Trust transaction. Citrix announced that shareholders of record on January 20 will receive approximately .1718… Read More »
What is a Reverse Morris Trust? You may have heard the terms Reverse Morris Trust or Morris Trust used in regards to a spinoff transaction. These terms describe two related types of transactions in which a company is able to sell assets without triggering a tax liability for either the company or shareholders. Naturally, this can be quite… Read More »
As we near the end of the month, the completion of three spinoff transactions will be driving changes in various S&P Indexes. Citrix Systems(CTXS) will be spinning off its GetGo division which will then merge with LogMeIn(LOGM) in a reverse Morris Trust transaction. After the transaction is completed on January 31st, Citrix will remain in the S&P 500.… Read More »
Burdened by debt since its private equity buyout a decade ago, Avaya has filed for Chapter 11 bankruptcy. The telecommunications software and hardware company posted a loss of $750 million for its most recent fiscal year. It is burdened by $6.3 billion in debt and $400 million in annual interest expense. “Avaya’s current capital structure is over 10… Read More »
In late 2015, Sergio Marchionne led the successful IPO and spinoff of Fiat Chrysler’s(FCAU) Ferrari(RACE) division. Now various speculations suggest that he may spin off Maserati, Jeep, or the Parts division. Marchionne, who is set to retire in 2019, has tried to lure a buyer, publicly courting General Motors(GM), even, but has not found a partner. Alternatively, some believe… Read More »
Biogen(BIIB) enters the final days before its spinoff of Bioverativ(BIVV), its global hemophilia business, as the new company begins when issued trading under the ticker BIVV. After the close of business on February 1, Biogen shareholders as of January 17 will receive one share of Bioverativ for every two shares they own. The distribution is expected to be… Read More »
Are you a business journalist on deadline with no idea what to write about? An editor with some space to fill? There are some stories that will work every time. How about this? Propose a spinoff that will never happen, like Amazon(AMZN) spinning off its web services business. Then, tell us why it won’t happen. Now, punch out,… Read More »
Nearly three years after its April 2014 spinoff from Sears Holdings(SHLD), Lands’ End(LE) is fairing only marginally better than its former parent, which is teetering on the edge of bankruptcy. Lands End, which just after its spinoff had a market capitalization of $900 million, is worth just $485 million today. The company has nearly $500 million in long… Read More »