Got a confidential news tip? Adjusted earnings of $0.24 per share came in slightly ahead of estimates. I've been writing for Seeking Alpha since 2013 after playing p0ker professionally. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com, 5 Artificial Intelligence Stocks to Buy Before They Skyrocket, PTON Stock Alert: 9 Things to Know as Peloton Plummets 15% After Reporting Earnings, NVAX Stock Falls 20% as Novavax Misses Q1 Estimates. We'll go further into BHC's separation strategy and how it figured into our original investment thesis a little later, but now let's get to Bausch + Lomb's quarterly numbers. Data is a real-time snapshot *Data is delayed at least 15 minutes. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Get the latest industry news first when you subscribe to our daily newsletter. A slow start turned into a strong finish for stocks thanks to encouraging debt ceiling updates and the latest economic data. Thats a 9.3% decline compared to the prior year, a change the company attributes to the impacts of Covid-19. I personally decided to take a bet and start loading up on BHC at current prices ($10) in hopes that I get the remaining spinoff shares later. As Tom mentioned, we continue to make significant strides in deleveraging our balance sheet this quarter. This is one of a few high-profile IPOs of late that have been priced below its range. 2023 CNBC LLC. Bausch is also hoping for a value over $20 billion since they only want to IPO "up to 20%" with hopes those proceeds will be enough to lower the company's debt. That price values Bausch + Lomb at about $6.3 billion a whopping $2.4 billion below what BHC paid for the company back in 2013. by Bausch Health. That contrasts with a total market cap of $3.46 . My understanding (which could be wrong) is that a U.S. generic is likely delayed until 2029. But, it doesn't matter since it will be free. I am not receiving compensation for it (other than from Seeking Alpha). If BHC can then distribute the other 80% to shareholders at those levels, it would should mount something akin to a stock dividend to shareholders of just under $4.4 billion. Bausch + Lomb rose about 3% in Friday's trading but remained well below its disappointing IPO price of $18. The major benchmarks rallied into the long weekend after lawmakers said they're making strides in debt ceiling negotiations. Heres how it works. More than 50 funds that own Bausch Health Companies Inc (NYSE: BHC) investors are reportedly seeking to block the eye-care business spin-off, Bausch + Lomb Corp (NYSE: BLCO). See here for a full list of the stocks.) As a Bausch Health Companies Inc. shareholder, it is a very attractive proposition. Article printed from InvestorPlace Media, https://investorplace.com/2022/05/bausch-health-bhc-stock-plunges-25-after-bausch-lomb-ipo/. Bausch Health Companies Inc. has hit the internal metrics necessary to justify spinning off more Bausch + Lomb shares. The pharma business of BHC that remains will also be a standalone, publicly traded company. 05, 2022 in Chicago, Illinois. Even after that spin-out, which would theoretically return a massive ~200% by itself, the BHC remainco will still have value. Please. This was below the company's expected range of between $21 and $24 per share. All signs are pointing towards some kind of transaction in 2023. In 2018 I founded Starshot Capital B.V. A Dutch AIF manager. Though Bausch + Lomb is separating from its parent, the two entities will continue to be closely linked. The plan is to launch a Bausch and Lomb debt offering (~2 billion/2.5x net leverage), an IPO of Bausch and Lomb ("up to 20%"), an IPO of Solta Medical ("20 to 30%") and use to proceeds to pay down $7 billion of debt to reduce the net leverage of the remaining company (Bausch Pharma) to 6.5-6.7x. Opinions expressed by Forbes Contributors are their own. At a share price of $15.66, this amounts to a market cap of $5.48 billion, which again, BHC still owns roughly 90% of. While management reiterated their confidence that the trial will go in their favor, saying their legal team "felt more confident at the end of the trial versus at the start of the trial," they did not go into much detail as to what happens if it goes the other way. That said, BLCO stock quickly shot above this IPO price, opening at $18.50 per share. These eliminations are generally found in the shareholder equity portion on the balance sheet and towards the bottom of the income statement when addressing the allocation of profits. 1125 N. Charles St, Baltimore, MD 21201. A basic rule of market physics is what goes up quickly often plunges soon thereafter. According to the Journal and Bloomberg, such companies include: BLCOs IPO was thought of as offering hope for a moribund 2022 IPO market. BLCO is currently trading over $15. The CEO made one little comment on the call (actually related to costs instead of the spinoff) which really makes me think a separation is likely in 2023(perhaps early 2023): Second, dis-synergies. The IPO filing was expected. He has also written a variety of books, including Artificial Intelligence Basics: A Non-Technical Introduction. Bausch + Lomb parent company Bausch Health is spinning off the eye-care company with an upcoming IPO which will list on the New York Stock Exchange and TSX with the ticker symbol BLCO. This . Bausch Health (NYSE:BHC) is a health care company with 3 distinct lines of business: The company (formerly called Valeant Pharmaceuticals) has had a troubled past that had left it with a huge debt load (over $30 billion) and legal troubles. The company has filed preliminary paperwork for an IPO, a deal that could become one of the biggest ever in the healthcare field. Future US, Inc. Full 7th Floor, 130 West 42nd Street, It's stock price crashed recently due to Q1 results. Of course, the more BLCO is worth at that time, the greater the impact will be on BHC's debt levels. In addition, as previously discussed, there remain a number of steps that need to be completed to achieve full separation, including the receipt of shareholder and other necessary approvals. Today, it appears the market has agreed. These ideas will not only come from successful value investors such as Warren Buffett, Eddie Lampert, William Ackman, David Einhorn, etc, but they will also come from other sources such as flagged insider trading, spin-offs, mergers, demutulizaitons and bankruptcies. In the meantime, we remain focused on commercial performance and improving our operating results reinforcing a solid foundation for the future. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines. Proceeds from any Solta IPO would be used to unlock more value for shareholders as well, and so we're willing to be patient and wait for that to happen. The stock . Currently, the stock is up more than 6% in afternoon trading on a strong opening day. Our full year debt reduction was approximately $3.8 billion of principal balances on a consolidated basis for the full year and $3.2 billion since the B + L IPO. Tax Letter This is perhaps the single greatest overhang and risk on the stock and one we are monitoring closely. Nvidia stock has more than doubled this year already, but analysts say explosive growth in AI gives NVDA plenty more upside ahead. Given these poor results and our loss of faith in management's ability to unlock further value via spinoffs following the completely botched Bausch + Lomb separation, we downgraded shares on May 10 to a 4 rating, designation we have not had a use for until now. Thomas Appio, the incoming CEO of Bausch Health, said the following in the earnings report. Bausch Health Companies (BHC) is a global healthcare stock that develops pharmaceuticals, medical devices and over-the-counter medications, with focus areas in eye health, gastroenterology and dermatology. Data is a real-time snapshot *Data is delayed at least 15 minutes. Bausch + Lomb sells contact lenses, eye drops and even implantable lenses for cataract surgery in more than 100 countries. If Bausch + Lomb is the canary in the coal mine, the IPO market is dead so is the funding climate for startups. For nearly 50 years, Bausch + Lomb traded on the New York Stock Exchange until the company was taken private in 2007 via a $4.5 billion acquisition by Warburg Pincus and Welsh, Carson, Anderson & Stowe. November 22' the FDA issued updated guidance that makes it harder for this to happen. Given the market conditions and no S1 being filed for Solta, the IPO may not go through. Get the latest industry news first when you subscribe to our newsletter. Investors seem to think that the companys initial valuation assessment may be more accurate. Last August, the company announced plans to spin off Solta Medical, its skin care business. Volume today is below average. Given our conservative estimates, BHC gives substantial upside with minimal downside risk. The market likely thinks this signals an imminent spinoff of the remaining stake. Bottom line, management did note the evaluation of multiple scenarios for planning purposes. He would go on to create other companies as well, including Hypermart.net that was sold to InfoSpace in 1996. After the spinoff, the rest of the Bausch and Lomb shares will be distributed and the rest of Solta Medical will be kept to help de-lever the company further. If you have an ad-blocker enabled you may be blocked from proceeding. The market likely thinks this signals an imminent spinoff of the remaining stake. Why Is Forza X1 (FRZA) Stock Up 145% Today? Again, as aforementioned, let's assume the Solta IPO does not happen and all we have is the Bausch and Lomb debt raise and IPO. Make no mistake: We're disappointed by the valuation Bausch + Lomb went public at Friday because we believe its value is far too discounted versus peers. Tax schemes range from basic tax dodges to highly complex transactions. 2023 Breaking Media, Inc. All rights reserved. Revenue in 2020 topped $3.3 billion, according to the IPO filing. According to Bloomberg Intelligence, a negative outcome for Bausch Health in its case against Norwich Pharmaceutical could move up the entry of a generic version by as much as three to four years as early as the end of 2024 and hit future sales by anywhere from $6 billion to $8 billion, assuming about $2 billion of sales per year, with little in the pipeline to offset the blow. I am not receiving compensation for it (other than from Seeking Alpha). Check out Bausch + Lomb's expected IPO date, price and more ahead of an offering that should energize a weak 2022 IPO market. Renaissance Capital says just 26 IPOs have priced in 2022 off 80% from the same point last year. We think Bausch + Lomb willeventually trade at a higher multiple. Get this delivered to your inbox, and more info about our products and services.
La Sportiva Tarantulace Climbing,
Articles W