Endo International’s (ENDP) shares have been beaten down by an opioid overhang and manipulation by short sellers. Shorts have found a thinly-traded stock they can manipulate. Crowded trades on the long and short side have made a mint for hedge fund managers. Spiking asset prices by the Fed was supposed to help the economy. It has simply allowed hedge funds to continue the speculation they engaged in prior to the Financial Crisis of 2008. Hedge fund fund have had Endo in their cross hairs due to the company’s high debt load, mesh claims and opioid litigation.
There is now a pathway to an opioid settlement. A global settlement has been struck by Johnson & Johnson (JNJ), the big opioid distributors. Purdue Pharma and Mallinckrodt have settled. Endo has settled in New York state and with several counties and municipalities in Tennessee. A global settlement should be imminent for Endo. However, state attorneys general appear hell bent on continuing to go to trial and waste the court and the public’s time.
ENDP is one of the most-highly shorted publicly traded companies, if not the most-highly shorted. Trump And The GE highlighted how famed financier, Reginald Lewis, would have pounced on ENDP by now. Before the one minute mark of the above video, Shock Exchange explains:
In the picture for this particular show … is a picture of Reginald Lewis who was either one of the first or the first black billionaire in the country with his acquisition of Beatrice Foods in the late ’80s. Along with him, Carl Icahn, Michael Milken, Donald Trump, Leon Black, Ivan Boesky… were giants in the financial world back in the 1980s. Every young black guy who came to New York in the 1980s thought he would be the next Reginald Lewis, including myself … I think it’s fitting because these guys in the ’80s talked a good game. They backed it up … They took risks and were able to evaluate risk appropriately. That’s how they were able to get excellent returns for these deals because they were able to quantify risk. I think Endo would have been an opportunity that Reginald Lewis would have pounced all over.
Lewis would have done deep research and due diligence on Endo. He would have concluded (1) the opioid risk was manageable and (2) the stock was being manipulated by short sellers looking to crowd into a trade. Lewis would have bought ENDP hand over fist and been loud about it. He would have put ENDP in play and made a mint off the stock.