Rebirth of England.

"Although GlaxoSmithKline is currently facing a major crisis, it is not fatal to its business. We believe that the most important thing for GlaxoSmithKline is to replan its strategy, especially in terms of the trade-offs between stable businesses such as vaccines, OTC (over-the-counter drugs) and consumer health products and specialty medicine businesses such as oncology and respiratory systems that have long R&D cycles and huge investments..."

In the process of shorting GlaxoSmithKline, Baron specifically asked his think tank to conduct research on GlaxoSmithKline's current situation and finally provide him with relevant information on the company's future development.

In fact, he has not yet made a final decision on whether to get deeply involved in the company.

Even though its stock price has plummeted, GlaxoSmithKline's market value is still over $800 billion. To have an influence on such a large pharmaceutical giant, it will inevitably require huge investment.

In the future, GlaxoSmithKline will gradually fall behind, with its market value falling out of the top 10 global pharmaceutical companies. Barron's also needs to find out the reasons for this and determine whether adjustments can be made to prevent the company from experiencing such a situation.

You know, the pharmaceutical industry has the characteristics of a long cycle.

Although a single big product may drive a company's market value soaring (such as the well-known little blue pill for Pfizer), it is not easy for an established pharmaceutical giant with established technology, pipelines, and commercialization teams to see its market value fall.

If we really fall behind, the hidden dangers may have been buried many years ago.

Therefore, in the end, GlaxoSmithKline must have had problems with its corporate strategy.

Of course, even though he didn't know much about pharmaceutical companies in his previous life, Barron could still guess one thing.

For example, one of GlaxoSmithKline’s main businesses is vaccines. It was once the "King of Vaccines". However, during the global epidemic before its rebirth, Pfizer returned to the top two in market value because of its corresponding vaccine business, but GlaxoSmithKline missed that opportunity. This is a clear example.

You should know that ten years ago in 2003, GlaxoSmithKline's market value ranked third among pharmaceutical companies, second only to Pfizer and Johnson & Johnson.

But before this incident, its market value had already ranked sixth.

In another ten years, GlaxoSmithKline's market value will even fall outside the top 15 in the world...

Of course, when talking about GlaxoSmithKline's strategy, we need to mention the company's CEO.

Prior to this, the first CEO after the merger of Glaxo Wellcome and SmithKline Beecham was Garnier. It can be said that he made great contributions to GlaxoSmithKline.

Under Garnier's leadership, the two companies, which were huge in size, complex in organization, and had different cultures and businesses, successfully achieved seamless integration.

During his tenure, GlaxoSmithKline has remained firmly in the top three of the world's market value - Garnier planned more effective marketing strategies for GlaxoSmithKline, optimized the pipeline of drugs on sale and under development, and ensured that more than 30 new products entered the late development stage, laying a good foundation.

Then in 2008, Garnier retired and handed over power to his successor Andrew Witty.

A few years after Andrew Witty took over, GlaxoSmithKline faced two relatively large external shocks in succession:

One was the American healthcare fraud case in 2012; the other was the Hua Xia market bribery case that just broke out.

It can be said that he had bad luck, but at the same time, as mentioned before, many things had been gradually accumulating for the outbreak before they happened.

"It seems that Andrew Witty's strategic decision-making is different from that of his predecessor. In his opinion, compared with more stable businesses such as vaccines, OTC, and even consumer health products, oncology drug research and development has a long cycle, high investment, and high failure rate, and is not a good business..."

This is the judgment of GlaxoSmithKline’s current CEO based on the document in Barron’s hands.

And according to information obtained from certain channels, Andrew Witty seems to be interested in selling or replacing all of GlaxoSmithKline's on-the-market oncology drug assets in order to obtain assets such as vaccines and OTC that they are more interested in...

Therefore, what Barron is facing now is how to adjust to avoid a decline in GlaxoSmithKline's business if he intervenes in it.

"The good news is that we have made more than $80 billion in profits from our short selling of GlaxoSmithKline. If we reinvest this money in the company's stock, we will be able to obtain a shareholding ratio of more than 8.5%..."

Daisy shrugged and said to Barron:

"In fact, some small and medium-sized institutional shareholders have already intended to sell off their holdings in GlaxoSmithKline. Of course, there are always investors who hope that the situation can be reversed, but that is obviously not a very wise idea..."

"So what do the major shareholders think now?"

As a company listed on the U.S. stock market, Barron was not surprised to see names such as Vanguard Group, BlackRock Group, and State Street Corporation among GlaxoSmithKline's holdings. After all, as mentioned before, with the scale of asset management of these groups, they are bound to invest heavily in stocks with large market capitalizations in the stock market, especially those that are components of stock indices.

In fact, before this, the ETF funds under Standard Chartered Merrill Lynch also held a lot of GlaxoSmithKline shares. Even when Barron's and others shorted the company, they did not reduce their holdings.

After all, there is something called a stock index ETF fund, which invests in stocks based on the weight ratio of each stock index component.

"them?"

Daisy took a sip of coffee, pursed her lips, put the coffee on the table, and said:

"Some of them reduced their holdings in GlaxoSmithKline, including Vanguard Group and BlackRock Group, but they are still on the list of GlaxoSmithKline's top ten shareholders, with a shareholding ratio of slightly less than 5%..."

"Then let's keep our holdings at this ratio for now."

"Are you preparing to..."

"Let's wait and see for now. I need to find a key to solve the mystery."

Barron is already the largest single shareholder of Pfizer Pharmaceuticals. If it intervenes in GlaxoSmithKline on a large scale...

Then perhaps some adjustments can be made to the asset integration between the two companies so that both parties can focus more on their core businesses.

However, these are not things that Barron can judge clearly at the moment, he still needs to conduct more research.