Key points:
- The Endo International stock price is rising despite looming bankruptcy.
- The firm could file for bankruptcy after it missed interest payments.
- Retail interest in ENDP shares remains high. Is it a buy?
The Endo International PLC (NASDAQ: ENDP) stock price was trading up 8% premarket despite reports that the pharmaceutical company was considering filing for bankruptcy protection to restructure its massive debt worth over $8 billion.
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The pharmaceutical company has been negotiating with some of its secured creditors after failing to make interest payments to some of its bondholders in June. Defaulting on debt obligations is usually the first step towards bankruptcy for most businesses.
Interestingly, despite the pharmaceutical company looming on the verge of bankruptcy, retail investor interest in the firm remains at an all-time high. Over 4 million ENDP shares had changed hands at writing, showing how actively traded they are.
In my last article on Endo International, I pointed out that it had won a lawsuit brought by purchasers of its OpanaER drug, stating that it had made an illegal deal with Impax Laboratories to prevent the manufacture and marketing of a generic version of the drug.
However, the win does not apply to other lawsuits regarding its role in the opioid pandemic.
Retail investors seem unbothered by the company’s precarious financial position, which has been made worse by the numerous lawsuits related to the opioid pandemic. Endo International has agreed to settle with some states and local governments for about $300 million.
However, the company is facing numerous lawsuits in different states for contributing to the opioid pandemic in the United States. The settlements are separate from its debt obligation, showing how grim the situation is.
According to an article by the Wall Street Journal, Edno International may file for bankruptcy protection if it cannot agree with its creditors, especially if the creditors demand full payment of the outstanding interest or the debt owed.
Given the company’s precarious financial position, I would avoid ENDP shares as a retail investor.
*This is not investment advice. Always do your due diligence before making investment decisions.
Endo International stock price.
Endo International (ENDP) shares were trading up 8.04% premarket despite looming on the verge of bankruptcy.