Updates: Peanuts, Ligand, Oil, Insurance and Healthcare
by Travis Johnson, Stock Gumshoe | November 13, 2015 1:01 am
Part one of the Friday File: Updates on some of our stocks
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Source URL: https://www.stockgumshoe.com/2015/11/peanuts-ligand-oil-and-insurance/
Hi Travis,
I like you splitting Friday Files into two pieces. Thanks.
Hi Travis,
What happens if Iconix is not able to refinance the convertible bond that’s due next summer? Does the stock price go to zero?
I think it’s $300 million or thereabouts, though that’s from memory. There’s not any clear reason why they would have to default, but it certainly wouldn’t be good news if that’s how it works out — it’s hard to see them going bankrupt because of that bond. More likely the debt will be refinanced but they’ll have to securitize some more assets to do it and pay a higher rate. Real bankruptcy risk would likely come only if all their debt snowballs with a difficult refinance and breaking their other debt covenants and something else bad happening to push them over the edge. Not inconceivable but not at all likely, in my opinion, given the ongoing cash flow. The underlying business is weakened, not dead.