Guys, if you haven’t been following the Valeant story. Then wake up! 🙂 This is better than Prison Break and Star Wars. Recap: VRX is pharma hedge fund darling. Largest position in Ackman’s portfolio. VRX selling point is that they don’t do R&D as it costs too much, so they acquire drug companies, fire the employees and push up the price of drugs. So huge growth, huge profits, huge valuation. US Gov has notice the rise in prices because some other pharma company overdid it. Now eyes turned to VRX. VRX “s**t” itself and announced a change is business strategy. No more acquisitions and will do R&D. Overvalued and with a lot of debt, the market sells their holdings and shorts the stock violently. (Including yours truly in my Market Neutral strategy). To make matters worse, Citron Research, comes out with a report that VRX could be the next Enron!!! See Citron’s website. Is there more? Heck yeah! Ackman has bought more shares after losing over $2 billion in 2 months as the stock dropped from $260 to $108, and VRX is giving some very confusing excuses….
About Sophocles Sophocleous
A Fulbright scholar and Chartered Financial Analyst, has been active in the global financial markets since 1999. This website displays his personal thoughts and investment strategy.