You are a wise man. Indeed, lawsuits happen all the time- it is common to ask for injunctive relief ("stop them now, your honor, from selling our tests or we will sustain irreparable harm") which I do not believe is usually granted, since proving "irreparable harm" is quite difficult- Courts usually reserve this type of relief for stopping a neighbor from cutting down trees whose ownership is in dispute or some other type of action which can't be undone later. Here, folks, we are just talking about MONEY. Even if Quidel continues to sell the tests in dispute and BD prevails in court 5 years from now, BD can be "made whole" with $$$$$ then-in other words, there is no justification for injunctive relief in this case, as I see it. Also, this suit may be resolved quickly or it may linger for years, but I suspect the ultimate outcome will be an out-of-court settlement-maybe even w/ Qdel common stock to BD, although I believe BD just sold the last of their Qdel stock a year or so ago. Maybe they want some of it back now that Qdel is making a few bucks.
Today was a temporary blip on the Qdel radar screen, a short term reaction to some admittedly bad news. Do I wish it hadn't happened?? Hell, yes. Was the timing bad?? Absolutely, especially if you think Qdel is about to report excellent earnings in the next few weeks, as I do. Am I going to sell all and look for the tallest building around to jump off of?? Doubt it. This little company is strong and getting stronger. Although their biggest seller, Strep A QuickVue, is involved in the suit, it is not their only product. Keep your eye on the ball, guys and gals. Don't forget CLIA waived HP and the P+G deal, the influenza test, Safeplan, etc. Think longterm. Although it may be difficult to imagine right now, this may be a blessing in disguise. We may actually get 2 positive bumps in the stock price, the first when the earnings are released, and the second when this suit is resolved. Even if Qdel has to pay a few bucks, the Street usually looks favorably upon such settlements because it replaces an unknown liability with a real number, a liability figure everyone can analyze and factor into the price. Remember, the stock was selling lower only 1 week ago before this news came out. At 3 3/4, it is selling at a P/E of about 15 times next year's projected earnings of $0.22, not a bad buy for a company w/ Qdel's growth prospects, lawsuit or no.
I'm sorry you,Howard, had to bail out- from the sound of your post and your seeming reluctance to sell,it sounds like it was more involuntary (a margin call) than voluntary. Been there, done that, bought the tee shirt, know the feeling-not much fun. I hope you were right and I was wrong on the earnings. |
