Greenberg: Questcor Smart Seller, Mallinckrodt Dumb Buyer?

SAN DIEGO (TheStreet) -- Whenever you see a deal like Mallinckrodt (MNK) buying Questcor (QCOR), you have to ask: Is this a case of smart seller, dumb buyer?

I've done zero work on Questcor, but over the past few years I've talked to a few very serious short-sellers who have.

When I saw the news this morning, the first thing that crossed my mind: Mattel (MAT) buying The Learning Company....Hewlett Packard (HPQ) buying Autonomy...Medtronic (MDT) buying Arterial Vascular Engineering.

All three of the targets were the focus of short-sellers, and all three famously blew up, or otherwise caused havoc, once inside the new parent -- for the very reason the short-sellers had been short. Mattel was perhaps the most wounded, and almost taken down by what it found once it owned The Learning Company.

No idea if that will happen here, but a quick peek at Mallinckrodt's history sure is a twisted tale: Started in St. Louis as a chemical company, ultimately sold to Avon (AVP), then Tyco (TYC), then spun off. Now a specialty drug rollup based in Ireland.

Oh, and this small disclosure from Questcor's 10-K: 

"We are involved in an ongoing government investigation by the United States Department of Justice involving our promotional practices and related matters, the results of which may have a material adverse effect on our sales, financial condition and results of operations.

"In September 2012, we received a subpoena from the United States Attorney's Office for the Eastern District of Pennsylvania (or USAO), requesting documents pertaining to an investigation of our promotional practices. We have been informed by the USAO for the Eastern District of Pennsylvania that the USAO for the Southern District of New York and the SEC are also participating in the investigation to review our promotional practices and related matters. We are cooperating with the USAO and the SEC with regard to this investigation. Responding to this investigation has been and is expected to continue to be expensive and time-consuming.

"If some of our existing business practices are challenged as unlawful, we may have to change those practices, which could have a material adverse effect on our business, financial condition and results of operations. If, as a result of this investigation, we are found to have violated one or more applicable laws, we could be subject to a variety of fines, penalties, and related administrative sanctions, and our business, financial condition and results of operations could be materially adversely affected."

Interpret at will.

-- Written by Herb Greenberg in San Diego

Follow @herbgreenberg

Herb Greenberg, editor of Herb Greenberg's Reality Check, is a contributor to CNBC. He does not own shares, short or trade shares in an individual corporate security. He can be reached at herbonthestreet@thestreet.com.

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