Endo International (ENDP) Stock Plunges 20% After Missing Interest Payment

  • Today, reports have surfaced that Endo International (ENDP) missed a bond payment.
  • This $38 million interest payment should be no problem, given the company's $1.4 billion in liquidity.
  • However, ongoing lawsuits are muddying the outlook for this company right now.
ENDP stock - Endo International (ENDP) Stock Plunges 20% After Missing Interest Payment

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It’s been a rather incredible week for Endo International (NASDAQ:ENDP). Just yesterday, we reported that the drugmaker surged 90%, as the company’s links to contraceptives, following the Dobbs v. Jackson ruling from the Supreme Court, gave this stock a big catalyst. Today, ENDP stock is down approximately 20% at the time of writing on a an entirely different catalyst.

Today, reports have surfaced that Endo has missed a $38 million interest payment on its debt. While the company reportedly has $1.4 billion in liquidity, this sort of relatively small amount of interest would be expected to be paid in due course. Accordingly, many investors appear to be concerned that there’s more beneath the surface to be worried about.

That’s partly because despite having liquid assets of $1.4 billion, Endo also has around $660 million in debt. These debt obligations are set to mature through 2027, a relatively long span of time, given the company’s liquidity position. However, a range of lawsuits stemming from the opioid epidemic could hit the company’s balance sheet hard.

That’s right, Endo isn’t only a contraceptives play, the company also makes opioids. This complicates matters greatly for investors considering the stock right now.

Let’s dive into what investors may want to make of this rather volatile price action with Endo.

ENDP Stock: Endo’s Significant Legal Troubles

There’s certainly a lot going on with Endo right now. On the one hand, there are some positive near- to medium-term growth drivers for the company. Any drugmaker tied to contraceptives has a bullish catalyst right now. For investors in ENDP stock, that’s great.

However, the number of opioid lawsuits that may need to be settled are still an anchor weighing this stock down. In fact, there’s too many cases to list them all here and the company’s press page is chock full of them. Reportedly, this year at least, Endo has already settled with at least three states on these lawsuits. Florida, West Virginia, and Alabama received $65 million, $26 million and $25 million, respectively, as a result of their legal actions against Endo. That’s more than $110 million for three states, with more states reportedly seeking massive payouts.

Thus, concerns about bankruptcy are real. Today, the company’s unwillingness (or worse, inability) to pay a $38 million interest payment on its debt has investors concerned. As it should.

Right now, I think this is a stock that’s got too much hair to consider. However, perhaps there is a way out that doesn’t involve bankruptcy from here. Either way, this will be a fun stock to put on the watch list right now.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.


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