Bill Ackman spent four hours last week defending his position in Valeant Pharmaceuticals (NYSE: VRX) after accusations of fraud more than halved the stock’s price in less than three months. The activist investor, whose Pershing Square Capital owns a roughly 6% stake in Valeant, made a strong argument in favor of the Canadian pharmaceuticals giant. Evidently, investors weren’t quite convinced, though, as shares sold off another 16% on the day of the presentation. But while the market can be fickle, especially when it comes to legal uncertainty in the pharmaceutical industry, there is a lot… Read More
Bill Ackman spent four hours last week defending his position in Valeant Pharmaceuticals (NYSE: VRX) after accusations of fraud more than halved the stock’s price in less than three months. The activist investor, whose Pershing Square Capital owns a roughly 6% stake in Valeant, made a strong argument in favor of the Canadian pharmaceuticals giant. Evidently, investors weren’t quite convinced, though, as shares sold off another 16% on the day of the presentation. But while the market can be fickle, especially when it comes to legal uncertainty in the pharmaceutical industry, there is a lot of value in VRX. In fact, traders have a chance to book a quick double-digit return while hedging their risk. Valeant Hit With A Media Firestorm Under the leadership of CEO Michael Pearson and his aggressive acquisition strategy, shares of Valeant surged nearly 25-fold in seven years. By acquiring what he considered to be mispriced drugs and folding them into Valeant’s distribution channel, he kept research and development (R&D) expenses low compared to other drug manufacturers. The trouble for Valeant began in August. First, presidential hopeful Sen. Bernie Sanders publicly requested the company answer for its practice of raising prices on… Read More