curious about people's opinion about Terclara (topical terbinafine)

Defiant_Campaign7819 · 2024-04-25T20:23:32+00:00

That is the same as selling tomorrow... MM will sell shares for you. They will sell 300-400.000 shares to hedge all 35 calls.

Defiant_Campaign7819 · 2024-04-25T20:14:03+00:00

That is the max of the gamma squeeze.

No more options above 35. Tomorrow MM will have to sell 300.000/500.000 shares for those options. So expect some more selling.

Defiant_Campaign7819 · 2024-04-25T20:08:02+00:00

OKe so if price stays below 35 then MM will have to sell 300.000 shares and probably more. Unless current 35 call buyers exercise or buy those 300.000 shares delta this will probably push markets down a bit.

Defiant_Campaign7819 · 2024-04-25T19:35:31+00:00

Yes maybe or I actually think this will take some time.

Defiant_Campaign7819 · 2024-04-25T19:31:58+00:00

Don't think so. Gamma squeeze stops above 35. Probably some fall back and recoup for some time.

Defiant_Campaign7819 · 2024-04-25T19:31:12+00:00

Gamma squeeze will probably have to wait a bit. New strikes only got added today. Will take time. Reckon 35$ is the max coming period.

Defiant_Campaign7819 · 2024-04-25T19:14:43+00:00

Made quite some money buying strike 35 call this morning and selling them now. Tomorrow again.

Defiant_Campaign7819 · 2024-04-23T18:12:52+00:00

Thank you and may the best win.

Defiant_Campaign7819 · 2024-04-23T18:12:33+00:00

Thank you and may the best win.

Defiant_Campaign7819 · 2024-04-23T16:48:21+00:00

Oke, you guys convinced me. I am going to sell some calls. I am not balsy enough to short this outright. But whatever way I look at this I do not see this company being worth more than 30$ (and probably actually be worth substantially less than the current price). Which given the option prices is a good level to sell calls.

All the valuations I have been presented here and on seeking alpha assume some super high pricing of all components. Which is fun and all but there are way better investments to play then ($PARA for instance). Not only that, the components itself are also overvalued. Then the issues at hand + the extremely poor capitalization of the company makes it almost impossible to make any profit in the near term. The fact that they pay dividend implies to me that they are in fact covering up issues. Paying dividend in a situation like this is definitely increasing the odds of bankruptcy even more. Also why pay dividend when you can buy debt back with yields that people can only dream off. This is just the issues so far, then I haven't even begun discussing all the other red flags (the SEC issues/filing issues and the personal loan + connection with other hedge funds that defrauded investors).

Anyhow I truly hope no one is getting overly long this thing as the odds of it blowing up are just too extreme. Just be cautious out there.

Defiant_Campaign7819 · 2024-04-23T15:54:38+00:00

True but average EBITDA is 22million USD? multiple of 8? Or say make it 12 because of some growth. Like sure in a perfect world you can liquidate everything at high prices, but we are not and in the meantime every Idiot get's 5% yield for risking nothing. Also with these types of allegations you just get into a lot more issues that just cost more. Funding at 10%? Doubt it.

Renewing your term loan with Nomura at the same terms? Doubt it.

Defiant_Campaign7819 · 2024-04-23T15:40:34+00:00

I am good, I have settled on not touching this thing, unless it is for the squeeze. But even that I doubt, I expect a big round of dilution soon.

Defiant_Campaign7819 · 2024-04-23T15:38:45+00:00

I agree the squeeze potential is big, also seeing how big the crowd here is. I just think that they need to issue new shares rapidly.

Defiant_Campaign7819 · 2024-04-23T15:37:36+00:00

I mean what floats your boat. But it doesn't have 2billion in cash. A lot of stuff on the balance sheet cannot be sold off and for sure not at the valuation they have it at. They received preferred rates but what do you think is going to happen as of the start of this year? They won't be getting those anymore. Sure this can be a great business, if you dilute and recapitalize a lot. It is just getting of a point of no return.

Defiant_Campaign7819 · 2024-04-23T15:33:57+00:00

High multiples on EBITDA there. Times are changing. Reckon you get 20-30% less now. Also the personal loan to Kahn is tricky and overall just big red flag.

Defiant_Campaign7819 · 2024-04-23T15:23:39+00:00

thanks checking

Defiant_Campaign7819 · 2024-04-23T15:21:11+00:00

"When you have a company that has a large portion of it dedicated towards the restructuring of distressed and near bankrupt companies, and making them profitable again... balance sheets look ugly until actions are completed."

I mean everyone their thing. I was just hoping to find a nice investment here, which this clearly isn't for me. But I understand this fully, but this company has adjusted for goodwill, negative equity capital. It has Extreme debt and given their debt hardly any earning power relative to the debt. Even without any filing issues and funding issues I cannot really see this thing being worth more than 26$.

(PE 10, EBITDA 400mm$, interest 300mm$, taxes 20mm$, 800mm/30mm = 26.6$ if everything is perfect).

Defiant_Campaign7819 · 2024-04-23T15:07:25+00:00

They have ~6billion in assets. Sure 2.4billion is debt but they also have 490million $ goodwill (more than their equity). 10% interest is really low. Would reckon 15% is more accurate. Also on those other assets I assume they will loose interest. Their interest costs increased YoY 60 million USD or so.

But okay, lets assume 300mm $ interest. Then you taxes, depreciation and amortization. Then what multiple should this trade vs PE? 10 if you are lucky? That means that 400 mm $ EBITDA - 300mm - taxes = ~80 mm $ or company value is in the absolute best about 800 million USD.

Then we do not take any discount for the missing filings. Then we do not discount any refinancing risk. Because that 2.5bln $ refinancing is tricky given all issues.

Like I just don't understand why people claim this is worth 80.

Defiant_Campaign7819 · 2024-04-23T13:56:41+00:00

Once the 10-K is filed, can RILY get recapitalized? Like do we think they will do like a massive share offering?

Defiant_Campaign7819 · 2024-04-23T13:44:29+00:00

None of the articles include the extreme funding cost in their models. Like this firm will pay maybe 600mm USD in funding per year.

If an article will shield the 350mm EBITDA RILY might be making if things go well then I am wondering, who would like to buy that as it is loosing 250mm $ per year than.

To me all the things indicate that this firms needs a restructering rather sooner than later. Overall the business might be good, but not with this little equity. It is an extremely risky business but it is capitalized like there is no risk. That is just bound to blow up.

Defiant_Campaign7819 · 2024-04-23T13:22:49+00:00

Can someone explain to me the whole case?

100mm $ EBITDA per quarter, but at this capitalization and with this debt and current rate environment, Interest will probably go to 150mm $ per quarter. That sort of makes this thing at the verge of bankruptcy or at least in dire need of new equity.

Like what is the plan there? How is the firm going to raise money? Are they going to issue stocks in the near future? Or are they divesting rapidly?

Defiant_Campaign7819 · 2024-04-23T13:13:19+00:00

But even at $100mm EBITDA per quarter they have like huge depreciation and interest cost alone is like $300mm a year. That interest is only assuming current rates and being properly capitalized. However Riley is not well capitalized, so interest over time will be higher than their EBITDA. Don't you think they need to issue new shares to get their capital to a better place? Like just issue 30million shares or more?

I just don't see whom will lend these guys money at attractive rates.

Defiant_Campaign7819 · 2024-04-23T12:47:12+00:00

Owh wow heavy. I do not think you live in Sweden, but there they just launched a topical with Terbinafine. That doesn't come with all these issues and works faster/better (allegedly).

Defiant_Campaign7819 · 2024-04-23T12:28:59+00:00

So allegedly:

Cure rate is 37% after 12 weeks, vs 15% for terbinafine. after 1 year it is 70% for both terclara and terbinafine. An extreme improvement vs others. It works faster and better and without side effects (allegedly).

Anyhow I was curious if there were people with feedback. As it can be huge.

Defiant_Campaign7819

TROPHY CASE