Originally Posted by
BlackPeter
Not so sure about this share. Might be really successful (if they manage to grow ad infinitum), but on the other hand - their balance sheet looks in my view quite sick. I reccon the market just feels they paid too much for their recent acquisitions in order to keep the growth going. Remember TTK? Different industry, but similar problem. Small company buying big company for a too high price.
Anyway - GXL has more than $500m intangibles on the balance sheet (most of it "goodwill"). Take that away and they are technically bankrupt. Now - ask yourself - is their name really worth half a billion dollars? I guess what they do is not rocket science (i.e. hardly any moat) - every supermarket can sell pet food (and they do) and independant Vets are as well plenty around. As well, little barrier to leave the nice GXL Vet who always tries to sell you on top for their service the overpriced dog rolls - and go back to your previous supplier.
Maybe still too much hype in the share price ...