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Report: Walgreen backs away from inversion; stock dives 6.5%

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Comments (40)
  • SoldHigh
    , contributor
    Comments (1013) | Send Message
     
    Only weak mgmt bows to pressure from a weak administration. Sell.
    5 Aug 2014, 03:08 PM Reply Like
  • wigit5
    , contributor
    Comments (4223) | Send Message
     
    Disregarding the political plug I agree as long as companies are within their rights to do it they should keep doing it. It is their responsibility to maximize shareholder value by any legal means necessary...
    5 Aug 2014, 03:14 PM Reply Like
  • SivBum
    , contributor
    Comments (2096) | Send Message
     
    wigit5,

     

    Right, what is good for the shareholders is good for your country. Have you taken a civics class in High School?
    5 Aug 2014, 03:17 PM Reply Like
  • wigit5
    , contributor
    Comments (4223) | Send Message
     
    SivBum,

     

    ...It's not the responsibility of the company to take care of the country. That is the responsibility of government. It isn't a difficult concept. I suggest you recheck that Civics class you skipped during your time at ridgemont high.
    5 Aug 2014, 03:48 PM Reply Like
  • SivBum
    , contributor
    Comments (2096) | Send Message
     
    wigit,

     

    All citizens, including shareholders, stockbrokers, farmers, burger flippers, soldiers, nurses, engineers, CPAs, waitresses, ... , etc elect Congress and POTUS to represent the interests of USA. The elected officials are the government whose duties include homeland security, ensure clean air/water, healthy food sources etc that include tax collection from citizens and businesses under the protection of the US government. No taxes, no marines to save our cargo ships from pirates. No taxes, no military forces to protect our international companies worldwide and so on.
    5 Aug 2014, 04:00 PM Reply Like
  • wigit5
    , contributor
    Comments (4223) | Send Message
     
    SivBum,
    Again it is a simple concept. A companies fiduciary duty to it's shareholders is to make as much profit as it possibly can utilizing every *legal* avenue it finds. A company has no responsibility to the government or people of a country outside of the laws and taxes that country mandates. Next thing you'll be saying is that corporations should be building new roads, schools, and paying for universal healthca.... wait strike that last one.

     

    I agree with you that citizens should do all the things you mention though... elect gov, pay taxes, etc....
    5 Aug 2014, 04:18 PM Reply Like
  • FriedMan2
    , contributor
    Comment (1) | Send Message
     
    According to Friedman, only citizens who have a right to speech and participation in the political process are supposed to be responsible for the state and environment around them. But corporations aren't people, so they can just go after profits. Unless they are people?!?!
    5 Aug 2014, 04:35 PM Reply Like
  • Tim'S
    , contributor
    Comments (200) | Send Message
     
    If corporations have the same rights as citizens these days, well then they have the same responsibilities. Family bread winners in Chicago will certainly appreciate Walgreen's decision along with the rest of America. It will do nothing but promote them. Walgreen sales will go even further up. As a stock holder of the company and tax payer, I say hail-hail Walgreen.

     

    Anyway, somebody needs to go back to civics class and figure out where and how our Government gets its power from.

     

    Tim
    5 Aug 2014, 05:13 PM Reply Like
  • NonnoDoug
    , contributor
    Comments (9) | Send Message
     
    Few investors realize that inversions can trigger capital gains taxes on shares owned; this would have been the case with WAG. Far better to acquire abroad, keep the US domicile and contribute $ to the party who will fight to change the US tax code (the GOP). As a long-term investor, I am pleased.
    WAG has its best days ahead. Buy!
    5 Aug 2014, 07:20 PM Reply Like
  • JD in NJ
    , contributor
    Comments (1540) | Send Message
     
    Do you really believe the Republican party will actually try to change anything? As far as I'm concerned the elected officials of both major parties are keen on maintaining things just as they are. Keep the little idiots fighting among themselves about which side is better, make sure that anyone who actually tries to implement REAL change is marginalized, and keep doing whatever it takes to make sure that when they leave office they've got a gold plated office lined up.
    5 Aug 2014, 07:25 PM Reply Like
  • wigit5
    , contributor
    Comments (4223) | Send Message
     
    @JD in NJ,
    And above all else keep upping the benefits and pay for themselves while prolonging their careers.
    5 Aug 2014, 07:27 PM Reply Like
  • SivBum
    , contributor
    Comments (2096) | Send Message
     
    wigit,

     

    You must think that the vast majority of the fortune 500 executives are failing their fiduciary duty to their shareholders by not moving their headquarters to the Bahamas or Bermuda or any one of those "treasure Islands" where corporate income tax is zero.

     

    And yes, most corporations do contribute to new roads, schools etc by paying their fair share in taxes. They also contribute to employee healthcare in FICA and subsidized healthcare plan with dental. It is the right thing to do business in America.
    5 Aug 2014, 09:37 PM Reply Like
  • jas_rogers
    , contributor
    Comments (37) | Send Message
     
    One faces a hierarchy of duties. Many among us have fought and died for our country. I am hard pressed to believe that it can be acceptable that greed should be honored over patriotism. As Will Rogers said, "It's a great country, but you can't live in it for nothing!"
    5 Aug 2014, 10:51 PM Reply Like
  • Van Hyder
    , contributor
    Comments (169) | Send Message
     
    Wasn't this the same company that said they weren't going to sell tobacco products anymore?
    5 Aug 2014, 03:16 PM Reply Like
  • uncledace
    , contributor
    Comments (134) | Send Message
     
    Nope...That was CVS.
    5 Aug 2014, 03:19 PM Reply Like
  • dacama1
    , contributor
    Comments (220) | Send Message
     
    I believe that was CVS Van Hyder.

     

    I think every company that can do it should do it. Tell Congress they will move back to the US when that extortion tax rate on overseas profits is removed.
    5 Aug 2014, 03:24 PM Reply Like
  • Long Term Value
    , contributor
    Comments (192) | Send Message
     
    If they have a drug distribution business that sells medications to US medicare/medicaid patients they would be quite wise to avoid the probable punishment the government can bestow upon them if they invert.
    5 Aug 2014, 03:27 PM Reply Like
  • Exquisite Decay
    , contributor
    Comments (206) | Send Message
     
    So for those on Medicare/Medicaid, who are currently prescribed Humira, going to need to worry if the US Government drops that drug because it is manufactured by Abbvie, which is doing a tax inversion?
    5 Aug 2014, 04:02 PM Reply Like
  • Long Term Value
    , contributor
    Comments (192) | Send Message
     
    Probably not. However, Humira goes off patent in 2016, which may challenge abbv, especially if Amgen is able to come up with a biosimilar.

     

    What I mean is a drug distribution as opposed to a drug developer business.

     

    US government can go to other pharmacy providers and punish walgreen. I am not saying this has been threatened, but it is probably on the radar.
    5 Aug 2014, 05:54 PM Reply Like
  • Exquisite Decay
    , contributor
    Comments (206) | Send Message
     
    You missed my point - maybe because I was not clear. It was not about Humira or any drug in particular. That was just an example because Abbvie is doing an inversion. My point was the anger and threats of boycotts and government retribution seem to be selective.

     

    US companies do not even need to do an inversion to avoid paying US taxes. They can set-up subsidiaries in say Ireland and have the revenue(not actual manufacturing or work mind you, just the revenue) shifted and recognized for tax purposes in that country at much lower corporate tax rates.
    7 Aug 2014, 10:09 AM Reply Like
  • Long Term Value
    , contributor
    Comments (192) | Send Message
     
    Yea and that is done all the time. Every tech company sets up some intellectual property in a Irish (or other tax advantaged) location and runs the licensing revenue through the entity holding the intellectual property.

     

    The inversion gives the benefit of accessing foreign held cash without repatriation tax. It also allows the entity to lend money to its US operations and use the debt cost as a deduction against US taxes.

     

    i am an Abbv shareholder amd hope their inversion is called off. Inversion triggers a recognition of capital gain from shareholders whether they sell the stock or continue to hold. It is very shareholder unfriendly.
    7 Aug 2014, 10:42 AM Reply Like
  • wapiti
    , contributor
    Comments (711) | Send Message
     
    Obama and his Chicago Democratic Muscle tell WAG its not personasl....just business. Mobsters still run Chicago. Stand up WAG and enhance shareholder value not political goodwill
    5 Aug 2014, 03:28 PM Reply Like
  • JD in NJ
    , contributor
    Comments (1540) | Send Message
     
    When the first inkling of a Walgreen's inversion came out here on SA, I posted that I hadn't heard anything from Walgreen management, just from activist investors who wanted them to do it.

     

    To this day, all I've seen has been speculation and what some hoped the company would do. Is there any firm evidence that the Board of Directors ever seriously entertained this notion? It feels like a rumor that took on a life of its own to me.
    5 Aug 2014, 03:33 PM Reply Like
  • TraderJoeF
    , contributor
    Comments (137) | Send Message
     
    Love it! Now RAISE MAHHH DIVVIE....

     

    Please.

     

    Thx
    5 Aug 2014, 04:06 PM Reply Like
  • JD in NJ
    , contributor
    Comments (1540) | Send Message
     
    They did.
    7 Aug 2014, 10:52 AM Reply Like
  • TraderJoeF
    , contributor
    Comments (137) | Send Message
     
    Yep...7%....Lower than average, but I respect that there are probably costs and such attached to absorbing Boots, among other considerations...I'll happily take the raise. Thanks WAG! Now next year, let's shoot for 20% shall we?

     

    xoxo
    7 Aug 2014, 12:59 PM Reply Like
  • damar18
    , contributor
    Comment (1) | Send Message
     
    As as stock holder in WAG and as an American I am pleased that Walgreens has decided not to move offshore. America has been very good to me and my family and has allowed Walgreen's to become very successful. I have traveled much throughout this world and find no country that can hold a candle to living here. I do not resent paying my taxes for the value received.
    5 Aug 2014, 04:35 PM Reply Like
  • evan.prospect
    , contributor
    Comments (702) | Send Message
     
    Appreciating America and demanding that our President actually provides some leadership on Corporate Tax Reform don't have to be mutually exclusive.

     

    Unfortunately, everything the White House does is political so instead of leading Congress towards bipartisan reform, he'd rather tell business to shut-up because he's more concerned about helping his Big Government, business hating politicos in the midterms.

     

    Once again, it's politics before policy. Ugh.
    5 Aug 2014, 05:15 PM Reply Like
  • Long Term Value
    , contributor
    Comments (192) | Send Message
     
    Calling off the inversion is also saving you a tax bill. Shareholders of an inverting company have to recognize and report capital gains even if they do not sell their stock.
    7 Aug 2014, 10:45 AM Reply Like
  • Lakeaffect
    , contributor
    Comments (1202) | Send Message
     
    WAG management is top notch. Of all the equities in my portfolio, I worry the least about this one. They make their decisions for the long term benefit of the company, even when it's not always obvious.
    5 Aug 2014, 06:02 PM Reply Like
  • Ronald McDonald
    , contributor
    Comments (41) | Send Message
     
    Change the corporate tax structure
    5 Aug 2014, 09:09 PM Reply Like
  • BrandonUK07
    , contributor
    Comments (124) | Send Message
     
    A few questions for an inquiring shareholder:

     

    1) Wasn't Obama going to sign a bill retroactively making inversions illegal? That was my impression and if he did, this topic was mute anyway since Walgreens had no completed the inversion yet?
    2) What's with the senior management leaving? First it was Crawford as president of pharmacy services and now I read a new CFO was hired?
    6 Aug 2014, 12:12 AM Reply Like
  • Regarded Solutions
    , contributor
    Comments (18322) | Send Message
     
    this gives WAG a bargaining chip as it gets pressured to dump tobacco, which it wont. If the US pushes that, then bye bye US.
    6 Aug 2014, 06:33 AM Reply Like
  • JD in NJ
    , contributor
    Comments (1540) | Send Message
     
    The pre-market action today (down 15%) is absurdly overdone. This smells like a buying opportunity to me.
    6 Aug 2014, 09:07 AM Reply Like
  • Regarded Solutions
    , contributor
    Comments (18322) | Send Message
     
    it most definitely is IMO.
    6 Aug 2014, 09:44 AM Reply Like
  • JD in NJ
    , contributor
    Comments (1540) | Send Message
     
    My order executed a few minutes after the open, and has made me about a buck and a half per share so far this morning.
    6 Aug 2014, 10:00 AM Reply Like
  • Regarded Solutions
    , contributor
    Comments (18322) | Send Message
     
    Love it...now hold it!
    6 Aug 2014, 10:06 AM Reply Like
  • JD in NJ
    , contributor
    Comments (1540) | Send Message
     
    I'm not letting go of these shares, or at least not for a very long time. I like growing value, but I love a growing income stream.
    6 Aug 2014, 10:17 AM Reply Like
  • JD in NJ
    , contributor
    Comments (1540) | Send Message
     
    And lookie here, we're up to 68.20 on a 58.50 purchase just over 3 months ago.

     

    I just love irrational dips. So far I've been better about buying on those than on selling when there's an irrational peak.
    18 Nov 2014, 03:09 PM Reply Like
  • Long Term Value
    , contributor
    Comments (192) | Send Message
     
    There is really a lot of greed around these inversions. For example Abbvie, who is intent on acquiring Shire and inverting.

     

    Reality is that Abbvie has benefited hugely from the US government high priced reimbursement for their drugs. Abbvie will soon announce their approved drug for Hep C. This will compete with GILDs Solvaldi.

     

    GILD charges 84k per patient for this drug in the US and it is likely Abbvie will charge a similar sum for their drug. however, GILd just announced they will sell Solvaldi in India for $900 per patient. We can be sure that Abbvie will also discount their drug to foreign marlets if they expect to compete.

     

    What we have here is the US taxpayer on the hook for huge costs for providing drugs to medicare and yet these same companies do not want to pay US taxes. At the same time these companies sell the same products to foreign countries for fractions of what we pay here.

     

    It is greed, and a rip off for the US taxpayer.
    8 Aug 2014, 06:55 PM Reply Like
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