26. 9. 2019

KGI Doubled the Value of Its Investment in Mallinckrodt Shares

Krupa Global Investments seized the moment when shares of the pharma company Mallinckrodt plunged. The plunge occurred after an announcement about hiring a consultancy firm for restructuring or potential bankruptcy of the company. Mallinckrodt is currently facing increasing legal actions related to the American opioid crisis. Such charges have already driven the Oxytocin producer, Purdue Pharma, out of business.  Mallinckrodt may be facing fines worth several billion dollars in total. However, we see the spreading of information about possible bankruptcy as intentional, and the shares of Mallinckrodt as undervalued. The speculations were refuted even by Mark Trudeau, Mallinckrodt’s CEO, who announced that using the services of restructuring consultants is a commonplace practice.

We had correctly understood the share price development and as a result we sold our position after a couple of days; making a return of over 100 %. However, we were monitoring the company’s stock and following the further development, we decided to repurchase Mallinckrodt shares. We’re currently holding the position, because our impression is that the price of the shares is undervalued.

Mallinckrodt is a pharma producer specialized in the production of special medication and generics; especially for neurological, rheumatological and ophthalmological uses. Annual revenues of the company are 3.2B USD.

We have great know-how in the pharma and healthcare industries. We are able to find and benefit from interesting investment options available in these fields; as is confirmed, for example, by the returns on our investment into Melinta Therapeutics shares.