Ackman Ends The Valeant Nightmare

Ted

FYI: While everyone has had their share of losing trades during their careers, the most high profile losing trade over the last year or so has been Pershing Square’s long position in Valeant Pharmaceuticals (VRX). After establishing a position in the stock back in Q1 of 2015, VRX was initially a profitable trade for Pershing as the stock briefly traded above $250 for a short period before coming crashing down in the second half of 2015, into 2016, and then into this year! All along the way, the big question everyone was asking was, “Will Ackman sell now?” For well over a year now, the answer to that question was no, but just today after the close, news hit the tape that Pershing has liquidated its position in VRX at a price of $11, which is more than 9% below Monday’s closing price. With Ackman and Pershing Square now out of the nightmare position in VRX, we’ve heard a number of people ask whether this may mark some sort of short term bottom in the stock as a former large holder finally cries uncle.
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/ackman-ends-the-valeant-nightmare/

Sven

That amounts to $3 billions loss. Ouch!

jerry

I lost a good deal of money in valeant (I own the Sequoia Fund) but my view on the stock is you have to know a good deal about the company's finances to purchase not just because its "cheap" I am not willing to put in the time and I have doubts I have the skill /knowledge to buy it )but good luck to anyone who thinks they know enough to purchase it..Now if I find out Sequoia has purchased it again I assume they will have done their diligence and then I might speculate. r

LLJB

According to the stuff the Sequoia Fund said as things unraveled they were doing extensive due diligence. In the end it didn't help.

davidrmoran

diligence due and other

https://www.nytimes.com/2017/03/19/business/william-ackman-pershing-valeant.html

Ted

@davidmoran: Four your information !
Regards,
Ted
http://www.mutualfundobserver.com/discuss/discussion/31833/ackman-ends-the-valeant-nightmare/p1

davidrmoran

??
New detail and color. Of interest. Did you feel cut in on?

davidrmoran

ooh, am I the first?

this is some major lolz:

https://www.nytimes.com/2017/03/29/business/dealbook/valeant-bet-was-a-huge-mistake-hedge-fund-chief-ackman-says.html

VintageFreak

the real news is something else. in the hedge fund world, you don't apologize. It's a sign of weakness. then when you do apologize it is not because you rid yourself of your ego. It is because that's the only way you might be able to stay in business.

if ackman is sorry, he can close the fund and return money to his investors, and then continue to use his "smartness" to grow his own personal portfolio. But wait! Why not continue to make 2 and 20% from the next set of idiots.

MikeM

Looks like he may be getting out of Valeant when the company's stock may have bottomed. Valeant has all new management and an entirely different scope, paying down debt, research, customer focus and quality over acquisitions and a fast buck. Buy high, sell low for this guy? Time will tell.

I contract-work for a segment of VRX. Actually bought a little of the stock after listening to the new CEO and research head. Hopefully the hole isn't to deep to dig out of.

VintageFreak

@MikeM. The question is - Is it a Ponzi scheme or not? Forget the fact I don't invest in individual stocks. I'm not going to invest in something on first principles even if I know I'd make a killing on it.

So is it a Ponzi scheme? Or am I mixing VRX up with some other stock?

MikeM

@VintageFreak, VRX is not a Ponzi scheme. It is a real company that unfortunately had dishonest management that tried to grow through acquisitions and poor, bordering on dishonest, accounting practices. They had short term profit growth mentality that was not sustainable. From what I've heard/seen, that set of managers were expelled and a more sustainable plan is in place. But it will take time. Problem is and will be for a while - debt. I hope it succeeds because I work with some wonderful, dedicated people that make a great product that will live with or without Valeant parent company.