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  • Vivus Management Moves Signal Desperation [View article]
    That's a fair point, but remember 99% of the VVUS employees - and thus their knowledge of the drug and the company are still there.

    A properly managed company has systems in place to capture institutional knowledge so that one or 2 people leaving - even top executives, does not cripple the organization. There are plenty of well qualified pharmaceutical executives (including Tony Zook) out there, who know how to handle a drug launch - even in obesity.
    Jul 19, 2013. 06:42 AM | 1 Like Like |Link to Comment
  • Vivus Management Moves Signal Desperation [View article]
    "seems fair"?

    VVUS - the company, has debt obligations - regrdless of who controls the board.

    FMC - as VVUS' largest shareholder (owner) is in the same boat as you and every other VVUS long out there.

    The management team of VVUS do not "deserve" free money for mismanaging a drug launch (several actually).

    Remember shareholders are the owners. In exchange for their time and talent, employees - including management - get paid a salary, and for top management they get free stock in the form of options.

    Think like an owner and your mindset will change. Here's an example that brings it closer to home:

    If you hired someone to mow your lawn, paid them an agreed upon weekly amount (salary) , plus gave them part ownership in your house (stock options) - would they "deserve" something extra when you let them go for doing a poor job?

    Most people would say they do not deserve anything extra.

    FMC was fighting against management and the board because they felt management was under-performing and the board was not holding them accountable. It remains to be seen if they can do a better job than the previous team.
    Jul 19, 2013. 06:34 AM | 1 Like Like |Link to Comment
  • Spectrum Acquires Talon - A Takeunder Case Study [View article]
    They can try but they will be unsuccessful.

    It's been known and disclosed for years that WP and DF control this company. Furthermore, they were out of cash - so this if actually the best deal possible. In their last quarterly conference call and 10-Q they said they would be out of cash at the end of June. retail speculators blind to the reality that we and others pointed out over a year ago still bid up the company to 40 cents per share.

    It's actually surprising that SPPI paid as much as they did - they could have just waited until the company went BK and bought the drug even more cheaply.
    Jul 19, 2013. 06:24 AM | Likes Like |Link to Comment
  • Vivus Management Moves Signal Desperation [View article]
    In a board takeover - the obligations of the company are unchanged. the Pharmakon debt is still owed by VVUS.

    A compromise is actually not the ideal situation. B/c just like Washington DC - a compromise will lead to gridlock on the board etc.

    The market (in our view) will react more favorably to FMC winning than to the current board winning. - We'll have the answer soon.
    Jul 18, 2013. 01:52 PM | 2 Likes Like |Link to Comment
  • Spectrum Acquires Talon - A Takeunder Case Study [View article]
    There will be no lawsuit for the following reasons:

    1) TLON has been in the process of evaluating strategic alternatives since January when they hired Goldman Sachs.

    2) The majority holders of TLON stock are Warburg Pincus and Deerfield Management

    Retail shareholders hold less than 10% of the stock and have always just been along for the ride - This is what we pointed out last year (see article linked above). Sadly, at that time many retail longs assumed we were a "short hedge fund" and ignored our warnings.
    Jul 18, 2013. 07:34 AM | Likes Like |Link to Comment
  • Spectrum Acquires Talon - A Takeunder Case Study [View article]
    Nope. Preferred shares with liquidation preference do in fact double dip. That's why VC's will use them on deals where the prospects of the company (in their eyes) are iffy.

    The preferred get their preference (if they so choose) and then get to participate in the common.

    As mentioned in the article, Carig Carlson is officially out of a job and therefore was not available to comment on how Warburg and Deerfield are treating their liquidation preference.
    Jul 17, 2013. 03:46 PM | Likes Like |Link to Comment
  • Spectrum Acquires Talon - A Takeunder Case Study [View article]
    Great question. The focus here was on the takeunder aspect.

    Talon had $25 million in debt. Based on yesterday's closing price for SPPI, the 3 million shares amount to about $26.6 million. those shares get delivered to the debt holders (Deerfield in this case primarily). The shares SPPI issues do not benefit TLON longs at all. They represent 5% dilution to SPPI longs.
    Jul 17, 2013. 03:43 PM | Likes Like |Link to Comment
  • Don't Let This Biotech Dig Its Talons Into Your Portfolio [View article]
    TLON acquired for $11.3 million - effectively 6 cents per share + contingent value rights. Holder of the common lost big time on this "takeunder". after liquidation preference, the CVR is about 0.3 cents per share
    Jul 17, 2013. 07:58 AM | Likes Like |Link to Comment
  • Vivus Management Moves Signal Desperation [View article]
    to get our free newsletter sign up at: http://bit.ly/10SbDco
    Jul 16, 2013. 06:15 AM | Likes Like |Link to Comment
  • Vivus Management Moves Signal Desperation [View article]
    The upside call to $17.10 is based on the chart & likely trading momentum.

    While your scenario is quite possible as well, there should be at least a brief move beyond $15 if FMC wins a majority of a board and thus can ensure a change in leadership.
    Jul 15, 2013. 05:40 PM | 2 Likes Like |Link to Comment
  • Vivus Management Moves Signal Desperation [View article]
    That's an alternate view.

    When companies transition from development stage to commercial stage, a change in leadership is often the right move. Just because someone "built the company from the ground up" does not mean they are properly qualified to run the show when needs change.

    Remember, FMC has been long VVUS since 2008. They haven't just come to the party recently to try to take over. (Though FMC was not the largest shareholder until this year).

    Activist shareholders generally tend to unlock underlying value by leading the charge for change. If VVUS management really had your interests first, they should have extended the olive branch months ago when FMC first expressed its concerns.

    Our analysis is not mean-spirited, but rather it is meant to lay out events as we see them.

    In any event, best of luck with your investments.
    Jul 15, 2013. 04:45 PM | 3 Likes Like |Link to Comment
  • Vivus Management Moves Signal Desperation [View article]
    The fact that OREX landed a partner for Contrave suggests that a partnership for Qsymia *could* be reached (in theory anyway). It is interesting that both ARNA and OREX reached deals with Japan-based pharma companies.

    Clearly a more qualified CEO re-initiates somewhat of a "honeymoon period" for the stock where investors may give the company a few months extra to work things out.

    Ultimately, the script numbers and cash burn will determine value regardless of who is in charge.
    Jul 15, 2013. 04:18 PM | 3 Likes Like |Link to Comment
  • Vivus Management Moves Signal Desperation [View article]
    Thanks for the kind words!
    Jul 15, 2013. 03:02 PM | 1 Like Like |Link to Comment
  • Vivus Management Moves Signal Desperation [View article]
    Which way do you think the proxy vote will go? Take our poll: http://bit.ly/14k2VHo
    Jul 15, 2013. 01:32 PM | Likes Like |Link to Comment
  • Vivus Vs. First Manhattan And QVT Financial [View article]
    Lol that's an exerpt from a VVUS press release. What else do you expect them to say?

    Spencer - the rising stock price is likely a sign that investors think FMC will win.

    Present management has already been in place so their winning the proxy fight would maintain status quo and thus stock price should remain the same.

    disclosure: no position
    Jul 11, 2013. 01:42 PM | Likes Like |Link to Comment
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