It was all smiles, happy talk and back-slapping at Cardinal Health Inc.‘s (NYSE:CAH) annual shareholders meeting Wednesday, the Columbus Dispatch reported.
Well, maybe it wasn’t that much of a love-fest, but words like “great,” “optimism,” “confidence,” and “well-positioned” described the company’s outlook, according to the Dispatch’s report.
Even shareholders weren’t in the mood to argue with Cardinal executives, voting down three shareholder resolutions that were opposed by the company’s board, including one that would’ve tied executive pay to performance.
And why would shareholders be anything but happy? The company’s stock price has shot up a whopping 7 percent in just over a week. Cardinal is up 11.4 percent for the year, compared with 7.5 percent for the Dow Jones Industrial Average.
Part of that surge may be tied to the company’s latest quarterly earnings, announced last week, which were good, but far from great. Those numbers likely have played just a small role.
Really, the person Cardinal shareholders should thank for their robust stock price is Tyler Durden, the pseudonym for a blogger who writes at ZeroHedge. (For an enjoyable look at the rise of ZeroHedge, one of the “most enterprising and combative blogs” focused on the financial industry, check out this 2009 piece from New York Magazine.)
On the morning of Oct. 26, Durden posted an article in which he used credit default swap data to predict that Cardinal would soon be bought. Until that point, Cardinal’s stock had risen less than 2 percent on the year.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
But after Durden’s post began attracting attention, the stock jumped as high as 6 percent that day before settling back after Cardinal issued a terse, three-sentence statement denying it was engaged in sales talks.
The curious thing is the stock has continued to climb even after Cardinal brushed off talk of being acquired. Are speculators not taking the company at its word?
Even Cardinal’s announcement at the shareholders meeting that it planned to buy back $750 million of its shares over the next three years failed to move the stock Wednesday. (The stock actually dropped a few pennies.)
So who could be most responsible for the new-found wealth of Cardinal shareholders?
Thanks, Tyler!
