News Worms
News Worms

Why Ackman's Exit May Not Be the End of Valeant's Stock Plunge

Why Ackman's Exit May Not Be the End of Valeant's Stock Plunge

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's stock plunged 13% in active premarket trade Tuesday, putting it on course to open at the lowest level since May 2009.

The drug company, which has faced both regulatory and congressional scrutiny for its business practices over the past year and a half, has seen its stock price fall from $204.69 per share when Ackman's fund disclosed its stake in March 2015 to $12.11.

In 2015, an investigation showed that Valeant was using a network between the drug maker and a web drugstore to sell their high-cost drugs instead of the generic or cheaper ones. Valeant and Ackman are now facing a shareholder lawsuit over alleged insider trading involving the failed deal for Allergan.

The investment, which represents about 1.5 percent to 3 percent of Pershing Square's funds, required "a disproportionately large amount of time and resources", the statement said.

William "Bill" Ackman studied at Harvard where he obtained a bachelor of arts degree in history.

Valeant Pharmaceuticals Intl (NYSE:VRX) last posted its quarterly earnings results on Tuesday, February 28th.

The average price paid by Pershing was $166.11 per share for the stock at Valeant that was purchased outright, not taking into account proceeds it received for stock sales that were subsequent to that or transactions involving options.

Here are three hedge funds that still love Valeant, according to their 13F filings made with the U.S. Securities and Exchange Commission. The billionaire is supposedly leaving the multinational specialty pharmaceutical company with a loss of over US$3 billion (AU$3.97 billion) after trying to rescue Valeant for some 18 months. Valeant Pharmaceuticals Intl had a negative net margin of 22.17% and a positive return on equity of 43.81%. The Market Capitalization of the company stands at 4.28 Billion.

Valeant Pharmaceuticals International, Inc is a pharmaceutical and medical device company.

International Game Technology PLC (NYSE:IGT) eases up 0.68% to close at $23.66 as 1.11 Million shares changed hands in regular trading session. "We made one very big mistake taking a passive position in Valeant", he told CNBC a year ago. Institutional investors own 64.34% of the company's stock.

In the end, you all know that I think Herbalife's settlement with the FTC and the new unproven business model it's had to implement since then is likely to cause big problems with the company's earnings expectations for the next couple years.


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