Shares of Valeant Pharmaceuticals dropped Tuesday after news surfaced late Monday that billionaire hedge fund manager Bill Ackman sold his remaining stock in the company. Deutsche Bank AG decreased their price objective on Valeant Pharmaceuticals Intl from $29.00 to $24.00 and set a "hold" rating on the stock in a research report on Monday, November 14th.
The investment is only between 1.5% and 3% of the entire funds of Pershing Square and required a large amount of resources and time that was disproportionate and therefore liquidated, said a statement released by Pershing.
Valeant shares recently traded on the New York Stock Exchange at $10.97, down 9.4%. It's hard to say what the dalliance with Valeant, which fired its CEO after fighting Ackman's addition to the board as secrets of its business model were unveiled, has cost the activist.
"At Valeant right now, it is all about divestitures", said Umer Raffat, an analyst at Evercore ISI. All content in our articles is for informational purposes only and should not be construed as an offer or solicitation of an offer to buy or sell securities. The company reported its last quarter on Dec 16. Ackman sold his shares for about $11 each, according to reports. The Stock opened its session at $12.41 and closed at $12.11 by showing decrease of -1.06 percent. Earlier in the month, Valeant says they've been subpoenaed by USA prosecutors investigating its drug pricing and distribution policies.
Bill Ackman screamed "uncle" on one of his worst bets ever - while getting squeezed by Carl Icahn on his second-worst bet. The stock has lost 95 percent of its value since mid-2015. Valeant has always been one of the hedge fund industry's favorite bets.
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Ackman's Valeant exit follows earlier high-profile losses in retailers J.C. Penney Co. and Target Corp.
Ackman first bought Valeant as a passive investment, saying he was happy with management.
In the end, you all know that I think Herbalife's settlement with the FTC and the new unproven business model it's had to implement since then is likely to cause big problems with the company's earnings expectations for the next couple years. Valeant is now trying to refinance its debt, which seems to have spooked investors even more. He called it as one of the biggest disappointments at that time.
ValueAct did not respond to requests for comment and Paulson could not be reached. During the period, Ackman supported the company's growth prospects and its intention of buying more companies to stimulate growth. It is unclear whether Paulson might put forth a representative or ValueAct, which once had two seats but has been trimming its exposure, might add another person.