Business

The lesson of Bill Ackman's $3 billion loss on Valeant Pharmaceuticals

The lesson of Bill Ackman's $3 billion loss on Valeant Pharmaceuticals

William Ackman's Pershing Square Capital Management LP has sold its stake in struggling drugmaker Valeant Pharmaceuticals International Inc., whose stock plunged after questions were raised about its business and accounting practices. Ackman Exit Sends Valeant Stock Tumbling VRX is set to open at its lowest level in almost eight years, down 10.7% ahead of the bell, following news activist investor Bill Ackman has abandoned his position in the stock.

Valeant Pharmaceuticals' shares were down again Tuesday (10.3% to $10.86).

Bill Ackman's Valeant chapter is finally coming to a painful close. VRX stock has shed 82.5% over the past 12 months, closing Monday at $12.11, so it's no surprise the equity is surrounded by pessimism.

Valeant stock plummeted almost 12% Tuesday to under $11. Two years ago Valeant's stock prices were valued as high as $263 per share.

Valeant's first bit of trouble came in August 2015 when Senator Bernie Sanders and Congressman Elijah Cummings requested information on why the company had raised the prices of two commonly used heart drugs.

United States anti-missile system's deployment underway in S.Korea
McMaster and senior South Korean presidential official Kim Kwan-jin held a phone conversation after the missile firings. North Korea criticises the drills and has previously conducted missile launches to coincide with them.

At Valeant's current price, the investment represented 1.5 to three per cent of Pershing Square's funds but required a "disproportionately large amount of time and resources", Pershing said in a statement.

The big bets and the brash personality of Ackman have made him a polarizing name in investing. In addition, Renaissance Technologies bought 2.91 million Valeant shares, Barclays Plc 1.31 million shares, and Millennium Management 1.25 million shares during the fourth quarter. At one time, Mr. Ackman had been one of Valeant's most vocal defenders. The stock was acquired at an average cost of $14.73 per share, for a total transaction of $73,650.00. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. "We are fortunate to have the benefit of a talented and experienced group of directors who share our strategic vision and are dedicated to turning the company around for the benefit of all shareholders and stakeholders". Kistler Tiffany Companies LLC now owns 5,567 shares of the specialty pharmaceutical company's stock worth $137,000 after buying an additional 2,719 shares during the last quarter.

On Dec 16 Valeant Pharmaceuticals International, Inc. He announced his stake in March 2015 and shares surged to $260 a share a few months later. The firm's quarterly revenue was down 12.9% compared to the same quarter previous year.

"Considering all of Pershing's efforts to create a turnaround situation with the new management team, we believe this "throwing in the towel" at these levels sends a poor signal regarding the road ahead for Valeant", analyst Gary Nachman of BMO Capital Markets wrote in a note. The stake remained unchanged during the quarter. Institutional investors and hedge funds own 64.34% of the company's stock.


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