The absurdity of this discredited Ackman “Platform Company” continues unabated. Pearson the pneumatic CEO is returning from sick leave after 3 months. He is no longer Chairman and the company which was going to hold an update call tomorrow has decided to postpone it and has withdrawn all prior financial guidance. Someone ought to check the debt covenants because I am sure there is a violation somewhere. Additionally, I know really frail old folks who have recovered in less time than this guy. Was he busy setting up a family office in a non-extradition country? I am short this stock because their business model is broken and there is a good chance that the enterprise value of this company is a lot lower with an outside chance of this being a zero shot. The numbers here can’t be trusted at all. It won’t be long before the debt holders get even more nervous than they are already. Basically this was a roll up using its overpriced stock and cheap debt to acquire no growth companies and then they would jack up pricing. The capital markets are closed to them and the pricing scheme is under congressional investigation. The SEC is rumored to have an ongoing full fledged investigation as we speak. Bottom line: with likely fraud having been committed its hard to figure out what this company is actually worth so the stock price needs to go much lower from here.
Then there is also the fact that Bill Ackman owns 8% of this company. He is under great duress as redemptions are coming fast and furious. He also thought it was a good idea to add in November. In that purchase he sold 9.6 million OTC January 2017 Puts at $60 to help fund the trade. OTC puts are extremely illiquid and must be traded with the dealer who sold them to you. So as this stock breaks its low of $70 I am sure Bill will need to post some collateral. This stock is in the death gripes of negative reflexivity and the lower it goes the more stock that will be sold. What exactly is Bill’s investment thesis at this point? This will go down in the annals of hubris and stupidity. If we break Novembers low of $69 with authority tomorrow all hell will break lose.
February 28, 2016
J. Michael Pearson to Return as CEO Following Illness, Effective Immediately
Robert A. Ingram Appointed Chairman of the Board as the Company Separates the Chairman and CEO Roles
Given the Timing of Pearson’s Return, Valeant to Reschedule Call to Discuss Preliminary Fourth Quarter 2015 Financial Results, Deliver Business Review and Provide Updated Expectations for 2016
Valeant Notes Receipt of Paragraph IV Notification on Xifaxan but Remains Highly Confident in its Intellectual Property Rights
LAVAL, Quebec, Feb. 28, 2016 /PRNewswire/ — Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) today announced that J. Michael Pearson returns as Valeant’s chief executive officer following his recovery from severe pneumonia and other complications, effective immediately. Howard B. Schiller, Valeant’s interim chief executive officer, will transition out of his current duties but will continue as a member of Valeant’s Board of Directors. Robert A. Ingram has been appointed Chairman of the Board as the Company has separated the roles of Chairman and Chief Executive Officer.
“On behalf of the Board of Directors, I want to thank Howard and the other members of the Valeant team for their dedication and hard work in Mike’s absence,” said Robert Ingram, Valeant’s Chairman of the Board. “I would also like to thank Howard specifically for his leadership over the past two months.”
“We are delighted that Mike is back as his vision and execution have been central to Valeant’s success over the past eight years, but his illness serves as a reminder of the importance of succession planning,” continued Ingram. “Given the size and breadth of our company, succession planning and building out our senior team to provide additional resources and support for Mike are high priorities for the Board. Our hope is that the Ad Hoc Committee will be able to conclude its efforts soon with regards to financial reporting and internal control matters, so we can all focus on building the best company we can.”
“I want to express my sincere gratitude to Howard for his willingness to step in and lead the company through a challenging period,” stated J. Michael Pearson. “I realize that recent events are disappointing to everyone and it is my responsibility to set the appropriate tone for the organization. My immediate priority will be to build stronger relationships with important constituents, such as managed care and other channel partners, regulators and government representatives, while improving Valeant’s reporting procedures, internal controls and transparency. I will focus on the retention and enhancement of our management teams and employee groups around the world and ensure that we maintain a culture that adheres to the highest ethical standards. Finally, we expect to deliver strong operating performance going forward by working closely with physicians to better serve patients, and we remain committed to reducing our leverage.”
Given the timing of Mr. Pearson’s return, the Company will be rescheduling its previously announced call to discuss preliminary fourth quarter 2015 results, deliver a business review, and provide updated guidance for 2016. In the interim, the Company is withdrawing its prior financial guidance. The Company expects to provide preliminary financial information for the fourth quarter of 2015, and 2016 guidance, in the near term. As previously announced, the Company will delay filing its 2015 10-K pending completion of the review of certain accounting matters by the Ad Hoc Committee, with the assistance of its independent advisors, and the Company’s ongoing assessment of the impact on financial reporting and internal controls. The Ad Hoc Committee is continuing its review of the circumstances relating to those accounting matters and appropriate actions to be taken.
In addition, Valeant confirms that its wholly owned subsidiary, Salix Pharmaceuticals, has received a notice letter dated February 11, 2016 from Actavis Laboratories FL, Inc. (Actavis) stating that the U.S. Food and Drug Administration (FDA) has received Actavis’ Abbreviated New Drug Application (ANDA) containing a “Paragraph IV” patent certification seeking approval to market a generic version of Salix’s Xifaxan® (rifaximin) 550 mg Tablets. Valeant has 22 Orange Book-listed patents covering Xifaxan® 550 mg Tablets that are scheduled to expire between August 2019 and October 2029. Valeant is highly confident in its intellectual property rights relating to Xifaxan® 550 mg Tablets and intends to vigorously enforce such rights in all applicable venues.
I hope this one goes to zero. I like your style here.
SEC Rumor is now fact!
Blue,
I know HLF’s recent rally has been attributed to speculation of a formal inquiry ending with only a manageable fine; but is it possible that the HLF rally is really a reflection of investors smelling Ackmans blood in the water and anticipating a major short squeeze as Ackman is forced to cover his HLF shorts in order to stop bleeding on multiple fronts?
As an aside, I love the way you think (no homo). You have a gift for reading between the lines and applying good ol fashioned common sense (not so common) critical thinking
^^^ major run on sentences. Sorry, banging out that comment at the gym…no time for proper grammar.
Billiejones,
The sharks are swimming around Ackman and they smell blood.
BlueStar –
Golf clap and hat tip. Nicely done.