Chris Lau

Biovail: Dividend Cut, Recent Acquisition Positive for Shareholders

The truck scandal was a terrible time for BVF. I knew it was a fake story the moment it came out. After that, it was clear that BVF had many issues.

The convertible offering is significant, but this was released after I wrote my article. Note the conversion offering price, and the terms (interest payments). It is FAR lower than the terms for Teck Corp. This is not a good comparison to make (resource company versus pharma), but I bring this point up because BVF may raise capital without paying excessively.

Looking forward, we investors must ensure that BVF is able to produce strong revenue and improving margins. If this does not happen, then I would not accumulate this stock. If this does happen, it would be a good idea to buy more shares.


On Jun 04 08:01 PM Clearlead wrote:

> (a) management has cleaned/cleaning up the Melnyk problems/scandals
> and they have made peace, which author addressed the merits of. why
> mention things that occurred under Melynk that doesn't seem fair
> to the current management?
> (b) the divy cut is positive b/c they ended the issue of it being
> unsustainable, and one might say now it can grow the divy in a manner
> that appropriately reflects growth and hopefully maintains a reasonable
> balance sheet..i do believe the author hit on this point enough.
>
> (c) acquisition = growth, etc., which author also addressed.
>
> frankly this company was a train wreck and it's making a turn around,
> which the author has emphasized.
>
> but what is concerning to me is the convertible offering, and whether
> they can now quickly execute some more good news and acquisitions
> to merit this move.
>
> yes, I am long bvf.

GlaxoSmithKline: Witty's Management Is Reason for Optimism

Hi, nice to see your article on seekingalpha as well! Keep up the good research.