Vivus 1997 sales about $100,000,000 for first year,
and about $25 millions earnings,
about a $1 per share.
Margins 80%.
PE 15, Share value $15 (near the actual day of the drop of $14, and not coincidental cause my numbers are not exact and WS numbers were).
Vivus 1998 sales if double $200,000,000
margins down to 40%
total earnings same $25 millions
about $1 per share again, and same $15 stuck price.
This is flat growth in earnings, if one is generous and start thinking of a good 30% earnings growth for years 99,2000,2001 then a generous PE of 25 gives us a $25 stock price in 98,
$31 for 99, $38 for 2000, and $47 for 2001 (not exact numbers).
This are conservative bearish estimates, taking into account the plant problems, viagra and even vasomax (doubt the last one)approval, it does not included posible growth due to Ireland plant, or full production of 10 lines in NJ (neither 100,000,000 million eager
ED users worldwide).
To go back to a 50% earnings growth one needs sales increase of 400% for the year 1999 (or even for the 2nd half of 1998).
I do not included the legal costs related to the news mishandling of the plant debacle which are inevitable due to the angry crowds out there,not me a tiny shareholder, but some of the big ones who did not managed to get out before Vinik, who did a perfect job going in and out, I wonder why. But the questioners who got Leland upset were clearly trying to get his words into the legalese trouble lines, cause they had an agenda to go after the company. Smart Leland did answer good for them, not for us.
I do not doubt the plant problems, not even trouble with all the dubious switching of plants to get FDA and or MCA approval, but do doubt that Vinik got out just by luck or good investment acumen, he probably had what the rest did not: the real information.
Gary Baggs this is why the Gann lines predicted $18.5 and not the $12 (TA could not predict full acute manipulation attacks in stocks, maybe the long or even short term changes but not the acute one day debacles). Thank you for all your TA it did help and educated me.
Zebra, they pick the problem solver first and then they got the problem? I wish they have published the hiring of the new CFO 2nd, and the plant problem 1st, the actual way of the events is Problems then problem solvers, and of course they have the now infamous "CHALLENGE" to proctect themselves from their garbage news.
This is a problem of trust, they at best hide the thruth and sugared the news. This is terrible, now they could predict good coming events, Will I believe then? Well, they could not care less, they probably have Vinik to eagerly comeback, so if I decide not to believe then I will miss the run up, Vinik will not miss the run up. Again, I will have to go with the full risks and full uncertainty, because I do not trust them.
I am heading out. Just checking for my exit point.
This is reality. This stock at best is a stuck one.
I think about Mexico, the goverment hit the people with a 40% devaluation in the peso value overnight, but the connected officials were unloading pesos for dollars months before, just like somebody did with Vivus. We were treated like third world poor workers. But I do hope they will pay someday.
Good buy, probably if one entry was $12 could double in one to two years, or even triple. I am not looking for that, cleaner stories out there with probable same outcome or better.
This is not the same as the first drop from the all time high, at that time bogus bad news hit Vivus, this time bogus news came from management arrogance (and probably dishonesty, this I could not proof so I said probably).
Richard, could you provide some more accurate projections than mine. I thank you in advance for your effort, and thank you a lot for your previous estimates.
And not even the chance of a takeover because the poison pill is to proctect management future, not ours (how strange).
Michael Price, Kirk Kerkorian, Carl C Icanh even Perelman where are you now? Please mount a takeover raid.
Leland does CEO = Chief Executioner Officer? I mean the execution of tiny shareholders.
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