Activist investor Ackman holds marathon call defending embattled Valeant
- Last Friday, Bill Ackman, who heads up the Pershing Square hedge fund and owns about 10% of Valeant, led a four-hour conference call to defend the company. Many people on Wall Street tuned in.
- He defended the company by saying it was a fundamentally strong firm experiencing a crisis, and he mentioned that the company might have to pay a fine, but it would ultimately bounce back.
- During the call, a short-seller, Andrew Left, tweeted that there was more unsettling news about Valeant which will be forthcoming—and that the stock could become worthless. But on Monday, Left's Citron Research (which released the bombshell report last month that's sent Valeant shares tumbling) released a new report which Left himself admitted had no new "earth shattering" claims.
Ackman's energetic defense of Valeant notwithstanding, the company is in the throes of a major crisis involving dubious pricing practices, a seemingly sketchy partnership with Philidor Rx (which it has since severed), and a stock that is down 50% from its high.
This translates into a $28 billion loss in market capitalization. Ackman alone has paper losses of roughly $2 billion, which is most likely part of what is driving his passionate defense of Valeant. At this point, it's hard to tell where this will net out, but it's clear that the short-sellers are still confident about their current strategy.