Before we get into the reason for this post a little shameless self-promotion. On Sunday August 27th, I’ll be participating in the Chicago Triathlon and this year I’m raising money for Lungevity, a charity dedicated to ling cancer research. As some know my wife Deb passed from lung cancer and hence the reason I am raising money for this very worthy cause. Frankly I don’t care if it’s shameless as when it comes to raising money for cancer research whether it is lung cancer, breast cancer or colon cancer it’s ok to be shameless. My goal is to raise $5,000 and I’m halfway there with just two weeks till race day so just click on the link I have provided and donate.
Thanks now onto the reason for this post. Many have asked why shares in Tandem (NASDAQ: TNDM) were up some 25% today on heavy volume. Did they find someone crazy enough to buy them? Is a major capital infusion forthcoming?
Honestly, we have no clue but here is what we do know;
1. This could be short covering.
2. Per SEC filings some of Tandem’s institutional investors have increased their position in the company.
3. Some technical indicators make shares look attractive and could have prompted computer related buying.
Based on what we know and what we are hearing Tandem’s lenders are still in control over the company’s fate. These lenders do not want to be left holding the bag and could well drive the company into bankruptcy protection. Here are the odds of possible Tandem scenarios based on what we know today;
A. Buyout – 200 to 1
B. Major capital infusion – 150 to 1
C. Bankruptcy – 3 to 1
The reality as we see it is since everyone has looked at the company already and no one has made an offer the company will run out of money before the year is over. Frankly anyone who would buy the company would be better off letting them implode and buying them after they declare bankruptcy. Sure, it’s possible they may get a life line a last-minute reprieve but as we note this is a longshot, kind of like the Bears making it to the Superbowl which according to the VegasInsider is a 66/1 longshot. Which is somewhat astonishing that the Bears are a better bet than Tandem, but we digress.
We hate to look at those pesky facts but these facts, what we know to be true tell us that nothing has changed and it’s just a matter of time before Tandem officially implodes. Let’s just hope they have the decency to do right by their patients, that they do not screw them like they have their stakeholders.