Medibank Negatives., page-3

i would say the following are the only negatives:

1. price - latest video is suggesting going to be 20 to 22 times. this is incredibly crazy valuation. price is the main risk, and it has to be sufficiently low with enough incentives to clear this deal.

2. market conditions - market keeps falling. cant remember the last green week. its a bear market. all insurance, financial sector weak.

3. cost cutting over stated - already being managed like a private company,not a govt company with a lot of 'fat' to be stripped. cost expense ratio is only 1% lower than NIB, and same as HCF. So there isnt any costs to be trimmed. this is consistent with the reports by CEO George saviddes, saying he wants to be aggressive with health providers. If he could cut costs so easily, why is he bothering with trouble with health providers?

4. health premium increases not enough to keep up with future costs.