This is just my opinion and research I've done on my own. Not financial advice.
I've been researching small caps and found something interesting. The company I'm looking into is a microcap in the primary care space. They operate medical centers for seniors and have been growing like crazy.
This company has had an interest in a buyout from multiple other companies including Humana and CVS, however, Humana has rights of first refusal because of an agreement they made in 2019 I believe. On September 22, 2022, CANO's CEO Marlow Hernandez went on CNBC with Contessa and talked about the interest in this space. CANO shares rose 34% on the rumors. Then CVS had “exclusive talks” with CANO further pushing the Share price higher. However a few days or weeks after, CVS “backs out” of the talks, and CANO stock plunged. (I believe HUMANA told them to back off)
A few days later CANO stock reported horrendous earnings with 24 million in the bank and they didn't provide guidance for '23. The stock went from the $9's to a current share price of $1.30 after activist investor Dan Loeb exited the position.
However, the headlines talk about CVS backing from the deal but nobody said that HUMANA was backing away from the deal, it was just overshadowed by the CVS headline. But here's where it gets interesting… The management team including the CEO was buying stock last year in the teens. They have not made any trades lately and have not even budged to offer any form of guidance (perhaps because they can't)…
with 24 million in the bank, the company is in serious issues if they can't find any more funds but they do have a 120 Million revolver last I heard on Twitter. I think they are between a rock and a hard place and they will choose to sell the company over watching it burn down and there are clearly interested buyers.
Apart from this, the person that took the company public Barry Sternlicht goes on CNBC every other week to talk about how the FED is killing the economy and how his hotels are doing fine but he's worried… In the case where he sees issues, he might push for a sale of the business because he needs to cash out and anything is better than $1.30 which is what is trading at right now.
Investors are pricing in a bankruptcy, however, where I live I can see the clinics and the cars that they use to run the business so there's a viable business my question is could it be oversold? does a lower in guidance really justify an 85% drop from the highs even though there are still interested parties?
This is a speculation and I might be reaching but I think that management has been dead silent, has not done any transactions, and has not released anything because there might be something in the works.. id like to know your input.
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