Billionaire Bill Ackman Exits Valeant with Huge Loss

Hedge fund manager Bill Ackman has sold his entire stake in Valeant Pharmaceuticals International, Inc. (NYSE: VRX) at a loss and would not stand for re-election.  The news sent Valeant’s shares down as much as 12.30 percent to $10.61 in the early trading. The stock has lost 95 percent of its value since mid-2015.

According to regulatory filings of mid-December, Ackman’s hedge fund Pershing Square held 27.2 million of Valeant’s shares, including 18.1 million of common shares and call options to purchase 9.1 million shares. According to Bloomberg, Pershing Square purchased shares at an average cost of $166.11 a share.  “We elected to sell our investment and realize a large tax loss which will enable us to dedicate more time to our other portfolio companies and new investment opportunities,” Ackman said in a statement.

The investment in Valeant represented about 1.5 percent to 3 percent of Pershing Square’s funds. However, the investment required a disproportionately large amount of time and resources.” The firm said in a statement.  “We appreciate the support and guidance that Bill and Steve provided during a challenging time,” Joe Papa, Valeant’s chief executive officer, said in an emailed statement. “Serving on the board of a company undergoing a transformation requires a significant commitment and we accept their decision not to stand for re-election.”

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