This page has been archived and commenting is disabled.

Avon Rips Higher, Halted Twice As Another LBO Rumor Squeezes Shorts

Tyler Durden's picture




 

Update: It appears our observation that AVP has a Debt-to-Ebitda of a stunning 3.7x that has blown away hope/hype of the LBO copming to fruition...

 

Just 4 short months ago, Avon stock soared after a fake private equity offer from a fake entity appeared. With a 20% short base, the stock exploded higher. Today, with 17.4% of the stocks' float short, The Wall Street Journal sparks some panic-buying...

  • *AVON HALTED; DISCUSSES STAKE SALE WITH PE FIRMS, WSJ REPORTS

Avon has now been halted twice and is trading up 12% (before re-opening).

 

 

As WSJ reports,

Avon Products Inc. is in discussions with private-equity firms about an investment that could help shore up the struggling cosmetics company, according to people familiar with the matter.

 

Avon is running an auction process for what is known as a private investment in public equity, or PIPE, with firms including Cerberus Capital Management and Platinum Equity. Bids are due next week, the people said, with some adding that a PIPE is just one of the options the company is considering.

 

It’s unclear how big a stake would be sold and there’s no guarantee such a deal will materialize.

*  *  *

It appears someone still needs to knock down the shorts...

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 09/10/2015 - 14:06 | 6532009 Death By Cold S...
Death By Cold Steel Report's picture

#GetARope  This is astounding! They are buying homes with 0% interest and renting them now... You want to buy a home? 4% interest unless your a company like Starwood Waypointe Residential Trust! 

http://www.msn.com/en-us/money/realestate/investors-are-snapping-up-bran...

Thu, 09/10/2015 - 14:10 | 6532019 Soul Glow
Soul Glow's picture

Stock Broker:  Hey Guy, I think you should buy Avon!

Guy:  Why's that?

Stock Broker:  Because my analyst is telling me to sell it!

Thu, 09/10/2015 - 14:10 | 6532031 adr
adr's picture

Why the fuck not.

Maybe Apple should float the idea of a private equity buyout. Send the stock soaring to $500 a share and a multi-trillion dollar marketcap

Thu, 09/10/2015 - 14:11 | 6532032 Kaiser Sousa
Kaiser Sousa's picture

BUY, BUY, BUY!!!

 

 

fucking ridiculous like everything else.....

Thu, 09/10/2015 - 14:14 | 6532060 q99x2
q99x2's picture

No thanks to the Bill and Melinda Gates Foundation - A French court upheld on Thursday a 2012 ruling in which Monsanto was found guilty of chemical poisoning of a French farmer, who says he suffered neurological problems after inhaling the U.S. company's Lasso weedkiller.

Thu, 09/10/2015 - 14:34 | 6532168 giovanni_f
giovanni_f's picture

I ike the smell of Roundup in the morning.

Thu, 09/10/2015 - 14:20 | 6532083 gmak
gmak's picture

Let's assume the report is correct.  the Debt / Common Equity ratio is 900%.  P/B = 45 times Debt / Mkt Cap = 1 times.   Where is the room for leverage in an LBO?   The PE firms make money by taking out fees and special dividends on the leveraging of the entity while at the same time using that leverage to buy back the stock.  I don't see B/S capacity to do this.  I don't think a bank is going to lend money to do this without some skin in the game from the PE firm. They only do it if they can get it back immediatelly through the fees and special dividends.  

 

This is a non-starter IMHO, and something used to engineer a short squeeze so someone with shares can exit their position.

Thu, 09/10/2015 - 14:28 | 6532126 lehmen_sisters
lehmen_sisters's picture

Cosmetics, Grilled Cheese Trucks, Chili's , Flingers, Baconater at Wendy's ...This is recovery mode!

Do NOT follow this link or you will be banned from the site!