Wednesday, June 19, 2013

Stocks DD Opines on Anacor: An interesting speculative long term value play


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Anacor pharma IR preso at Deutsche Bank Conf

-> http://www.media-server.com/m/p/o6med9nj

-> http://www.scribd.com/doc/149510844/Anacor-Investor-Presentation-June-2013-Compatibility-Mode

1. They have cash at least until launch next year
2. 1 interesting pre-NDA asset (onychomycosis) and another more interesting phase 3 asset(atopic dermatitis). Phase 3 to start early next year. There are good market comparables which seem to suggest the 2 products together could garner $300m in peak sales conservatively. Read company's IR presentation for details and Seeking Alpha contributors. SA link
3. Insider ownership very high at 46%. The company was founded >10 years ago.
4. Their market cap is <$209m
5. CFO purchased approx 43k shares at ~$5.2 in the open market this week.
6. Share price of $5.18 is below their recent secondary offering of $6.39.
7. They may be awarded a potential monetary settlement with Valeant in September after their arbitration hearing. If they win , they could get damages up to $215m in which case they will likely have no need to dilute in future. I will be studying the merits of this case and make another post.

Keep in mind, this is a speculative play.

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Monday, June 17, 2013

Stocks DD Cites: SEC taking interest in minority buy-outs


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http://dealbook.nytimes.com/2013/06/17/a-warning-shot-on-management-buyouts/

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Sunday, June 2, 2013

Stocks DD Opines on Shareholder rights: Why Shareholders rights of publicly listed companies require changes


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Is being a shareholder just exercising right by voting on annual proxies ? 

I hope not.

Is being a shareholder just submitting proxy proposal annually ?

I hope not.

Why not expand shareholder rights to make the board and management accountable to shareholders ?

1. Can company's management be mandated to answer questions in quarterly earnings call for questions raised by a group of 50 shareholders say owning >1% ?

2. Can company's board be mandated to answer questions every quarter  raised by a group of 50 shareholders say owning >1% ? A quarterly shareholders meeting in lieu of annual shareholders meeting.


  • Eg:  Company A  has a huge cash hoard. Till date the board has not answered shareholder's questions on their plans for this cash which is earning <0.5% interest. Shareholders believe there are lots of missed strategic market opportunities for this cash.
  • Eg: Shareholder's believe Company A could be a great acquisition candidate for company B that would likely offer Company A at least 3 times its current market price based on company B's recent market acquisitions. Can company A's board be forced to have discussions in good faith with company B.
  • Eg: If shareholders need  changes in the way company conducts itself , there has to be a way for shareholders to suggest this to management/board and the management/board needs to be mandated to respond.  Company A has investor relation practices that has room for improvement. 
3. If there is compelling reason to have ad-hoc proxy vote on critical shareholder proposal  (that meet specified criteria) raised by say 50 shareholders owning >1% without waiting for the annual proxy , shouldn't it be possible? 
  • Eg: Company A's shareholders believe there is compelling market evidence that could value the company 3 times in a strategic acquisition with Company B. Shareholders would want company  A's board to pursue this opportunity. Shouldn't there be a proxy vote without having to wait for the annual proxy ? Keep in mind markets change fast.
4. In today's digital age, Shouldn't companies be mandated to provide a current list of shareholders to informally discuss, assess, poll proposals that would maximize or unlock shareholder value before submitting the winning proposals for proxy voting ?

These rights become esp important when there are conflicts of interest in the board.



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