The positive momentum in Teva Pharmaceutical Industries Ltd.'s (NYSE: TEVA; TASE: TEVA) share price continued late last week in New York, even after what might seem to be bad news for the company. The downgrading of Teva's bonds to junk bond by the Moody's credit rating agency and the report of another sale of Teva shares by Allergan did not affect the positive sentiment towards the share, whose price rose 1.5% on Friday, after leaping 8.5% on Thursday.
Teva's current share price is $22.10, reflecting a $22.4 billion market cap. Since hitting its lowest point in early November on the day after Kare Schultz became Teva's new CEO, Teva's share price has almost doubled.
From a broader perspective, the company's share price is still 28.6% lower than it was in early August, when Teva's second quarter reports were published. Those reports included a huge write-down for good will and a downward revision of the company's guidance for the year. Allergan has taken advantage of the recent surge in Teva's share price to sell some of its shares in Teva, after become the largest shareholder in Teva with a 9.9% stake when Teva acquired Actavis, Allergan's generic division in a cash-and-shares deal in 2016.
According to a report to the US Securities and Exchange Commission (SEC) late last week, Allergan sold 6.55 million Teva shares over the past month at prices varying from $18.10 to $20.10 for a total of $124 million. Allergan thereby reduced its stake in Teva to 6.8%, with a current market value of $1.5 billion. When Allergan first acquired its Teva shares in August 2016, they were worth $5.3 billion, but the downward spiral in Teva's share price forced Allergan to recognize a $3.3 billion decrease in the value of its Teva shares in preceding quarters. Two months ago, Allergan reached an agreement with the JP Morgan bank, in which it encumbered 25 million Teva shares to secure a loan from the bank to Allergan.
Published by Globes [online], Israel Business News - www.globes-online.com - on January 14, 2018
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