Chapter 939 Whether to join
“Although GlaxoSmithKline is currently experiencing a major crisis, it is not fatal to its own business. We believe that the most important thing for GlaxoSmithKline is currently , is to re-plan its strategy, especially in the stable and stable businesses of vaccines, OTC (over-the-counter drugs) and consumer health products. The trade-offs between specialty drug businesses with long R&D cycles and huge investments, such as tumors and respiratory systems..."
In the process of short selling GlaxoSmithKline, Barron's specifically asked its think tank to target GlaxoSmithKline. GlaxoSmithKline conducted a study on the current situation and finally provided him with relevant information on the future development of the company.
In fact, he has not yet made a final decision on whether to be deeply involved in this company.
Even though the stock price has plummeted, GlaxoSmithKline's market value is still over 80 billion US dollars. To have an influence on such a huge pharmaceutical giant, it will definitely require a huge investment.
And in the future, GlaxoSmithKline will slowly fall behind, and its market value will fall out of the top 10 global pharmaceutical companies. Barron's also needs to find out the reasons for this, and determine whether adjustments can be made to prevent this company from happening. .
You must know that the pharmaceutical industry has long-term characteristics.
Although a large single product may drive a company's market value to soar (such as the very famous little blue pill for Pfizer), for an established pharmaceutical giant whose technology, pipeline, and commercialization team have already been formed, Speaking of which, it is not that easy for the market value to fall.
If you really fall behind, the hidden dangers may have been laid many years ago.
So later on, GlaxoSmithKline must have had a problem with the company's strategy.
Of course, even though he didn't know much about pharmaceutical companies in his previous life, Barron could still guess one thing.
For example, one of the main businesses of GlaxoSmithKline currently is vaccines. It was the "King of Vaccines" in the past, but during the global epidemic that occurred before his rebirth, Pfizer due to the corresponding The vaccine business has returned to the top 2 in market capitalization, but GlaxoSmithKline missed that opportunity, which is evident from this.
You must know that ten years ago in 2003, GlaxoSmithKline's market value ranked third among pharmaceutical companies, second only to Pfizer and Johnson & Johnson.
But before this incident, its market value was already ranked sixth.
In another ten years, GlaxoSmithKline’s market capitalization will even fall outside the top 15 in the world...
Of course, when talking about GlaxoSmithKline’s strategy, we need to mention the company’s CEO.
Prior to this, the first CEO after the merger of Glaxo Wellcome and SmithKline Beecham was Garnier. It can be said that he made a great contribution to GlaxoSmithKline.
Under the leadership of Garnier, the two companies, which are huge in size, have complex organizations, and have different cultures and businesses, have successfully achieved seamless integration.
During his tenure, GlaxoSmithKline has been firmly among the top three in the world in terms of market capitalization. Garnier has planned a more effective marketing strategy for GlaxoSmithKline, optimizing the sales of drugs and products in the market. We have developed a drug pipeline and ensured that more than 30 new products have entered the late development stage, laying a good foundation.
Then in 2008, Garnier retired and handed over power to his successor, Andrew Witty.
A few years after Andrew Witty took over, GlaxoSmithKline faced two relatively large external shocks:
One was the American medical fraud case in 2012; the other was the Chinese medical fraud case that had just broken out before. Market bribery case.
It can be said that he had bad luck, but again, as mentioned before, many things were gradually accumulating for the explosion before they happened.
“At present, it seems that Andrew Witty’s strategic decision-making is different from that of his predecessor. In his view, compared with more stable businesses such as vaccines, OTC, and even consumer health products, the research and development cycle of oncology drugs is long. , the investment is large, the failure rate is high, it is not a good business..." This is the judgment of the current CEO of GlaxoSmithKline in the information in Barron's hand.
And according to information obtained from certain channels, Andrew Witty seems to intend to sell or replace all of GlaxoSmithKline’s oncology drug assets on the market to obtain vaccines, OTC and other assets that they are more interested in...< br>
So what Barron faces now is how to adjust to avoid a decline in its business if he intervenes in GlaxoSmithKline.
“The good news is that we made more than $8 billion in profits from shorting GlaxoSmithKline. If we reinvested these funds into the company’s stock, we would have gained approximately 8.5% The above shareholding ratio..."
Daisy shrugged, Speaking to Barron:
“In fact, some small and medium-sized institutional shareholders are already interested in clearing out their holdings in GlaxoSmithKline. Of course, there is hope that the situation can be reversed at any time. Investors, but obviously that's not a very smart idea..."
"So what are the thoughts of the major shareholders now?"
As a company listed on the US stock market, Barron was not surprised to see Vanguard Group, BlackRock among GlaxoSmithKline's shareholding institutions. Group, State Street Group and other names - after all, as mentioned before, with the scale of asset management of these groups, they will inevitably invest heavily in stocks with high market capitalization in the stock market, especially those constituent stocks of the stock index.
In fact, before this, the ETF funds under the Standard Chartered-Merrill Lynch Group also held a lot of GlaxoSmithKline stocks, and even when Barron’s short-selling the company, they did not reduce it. This part holds shares.
After all, there is something called a stock index ETF fund, which invests in stocks based on the weight ratio of the constituent stocks of each stock index.
"Them?"
Daisy took a sip of coffee, pursed her lips, put the coffee on the table, and said:
“Some of them have reduced their holdings of GlaxoSmithKline, including Vanguard Group and BlackRock Group. , but they are still among the top ten holding institutions of GlaxoSmithKline, with a shareholding ratio of Both are slightly less than 5%..."
"Then let's put our holdings at this ratio for the time being."
"Are you prepared to..."
"Let's wait and see for now, I need to find a key to solve the puzzle."
Barron's is now the largest single shareholder of Pfizer. If it intervenes in GlaxoSmithKline on a large scale...
Then it may be possible to integrate the assets between the two companies. Some adjustments have allowed both parties to focus more on their own core businesses.
However, these are not things that Barron can clearly judge now. He still needs to conduct more research.
(End of this chapter)