dglobalnews.com USA investment firm bails on Laval's Valeant pharmaceuticals
Published: Wed, March 15, 2017
Markets | By Armando Jensen

USA investment firm bails on Laval's Valeant pharmaceuticals

USA investment firm bails on Laval's Valeant pharmaceuticals

Following a decision by longtime investor and hedge-fund manager Bill Ackman to sell his shares in the struggling drugmaker, Valeant Pharmaceuticals' (NYSE: VRX) stock price was down 10% at 12:45 p.m. EDT today.

Ackman's Pershing Square made its investment in Valeant public in March 2015, when Valeant was trading near $195 per share.

Mr. Ackman and Stephen Fraidin, Pershing Square's vice chairman, will leave the company's board following its next annual meeting. The company's last traded volume of 21.81 million shares as compared to it's an average volume of 17.18 million shares.

By September 2015, Valeant stock stopped climbing and began its descent - by mid-November, the stock would be down to $75 per share.

Ackman has been on my mind in the past few weeks because he's also bet more than a billion dollars shorting Herbalife HLF, +0.48% which I'm also short on. Ross bought 5,000 shares of the company's stock in a transaction on Wednesday, December 14th. But Nachman cut his price target on Valeant stock to 15 from 19. When he takes a position in a company-whether his position is that it's undervalued and has loads of money-making years ahead of it or that it's a dream-killing pyramid scheme and should be shut down by the government A.S.A.P.-he does so with mind, body, and spirit. According to their observations and findings, the stock could provide a high EPS of $1.21/share and a Low EPS of $0.37/share.

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Valeant is extending the maturity date on three loans to 2022 in order to match the maturity date of its term loan F. The company is also paying down revolving credit debt and its term loan A debt as part of the refinancing effort, which includes the almost $3.3 billion sale of secured notes. After all, Bill Ackman, one of Wall Street's most respected investors, just did the same.

Recently, the company reported fourth-quarter and full-year financial results showing sales continue to fall, and while the company is selling non-core assets to pay down debt, it's still got a lot of work to do.

Investors seem not happy with the company's performance. He could have walked away without a share back in early 2015 after his Valeant-Allergan merger ploy failed.

This wasn't an overnight plummet from $262 per share to $10.50; it's been a long, slow death, even as CEO Joe Papa insists that Valeant is in the midst of transformation and turnaround. Ackman later called Valeant-the worst-performing stock he says he ever owned-a "very big mistake". Frontier Wealth Management LLC purchased a new position in shares of Valeant Pharmaceuticals Intl during the fourth quarter valued at approximately $149,000.

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