Monday, March 13, 2017

Bill Ackman out of VRX

     Word on the street earlier today was that Bill Ackman was selling out of Valeant Pharmaceuticals [VRX] and stepping down from the board of directors. Turns out those reports are right as it has been confirmed by many that the huge block trade made just after 4:00pm was the sale of all of Pershing Square's shares. Ackman sold 27.2 million shares for $11.00 per.

     The future of Valeant is looking bleaker than ever now. The activist investor Bill Ackman doesn't believe that they are going to be able to turn things around and I think that resonates with what the market has been saying as well. After the head and shoulders breakout up to $16.50 they plummeted after their debt restructuring became public. Many saw the new debt as a pessimistic view of the company and the market reacted justly. 

     The after hours trading of Valeant shows it down 9.33%, the equivalent of $1.13. Much of that I'm sure is from the massive sale of Ackman, but other smaller institutions seem to be hopping on board in a fire sale.

     Now, maybe Pershing/Ackman selling his stake and stepping down creates an opening for Carl Icahn. If you don't already know, these two guys don't really like each other and each of them think the other has a poor strategy. They both love being right, obviously. But I guess who doesn't. Icahn may see this as the perfect time jump full in on Valeant at a much cheaper price and prove to him and everyone that he is better than Bill Ackman. 

     This news COULD put Valeant at a very cheap buying price for the individual, but the future outlook is not too bright after this move, their debt restructuring, and their inability to sell the segments of their business they want to sell. 

Proceed with caution. 

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