John Hempton of Bronte Capital just gave everybody a heads up on an allegation that might be true, just not where it was thought to be.
It looks like Hedge fund hotel holding debacle Valeant Pharma, although for the moment clear of “channel stuffing” in the U.S., as alleged by Citron Research, may in fact have been doing it Eastern Europe. This is all too strange and almost hard to believe.
We may have all been obsessed about the wrong pharma wholesaler, according to a Slovenian business news site (www.finance.si) which reports issues at potential party at the heart of the VRX mess: a company called PharmaSwiss. There are currently denials, and the coincidental very recent termination of several employees, including a finance director. A question mark is why PharmSwiss, which insists that product volume in fact down for the year, suddenly needs a warehouse from another wholesaler called Kemofarmacija.
Is this all a head-fake or a witch hunt?
Random: The Volkswagen cluster-farfegnugen mess all started with a small research firm doing emissions testing, without any awareness they would stumble on a global fraud, uncovering the too good to be true diesel story that came from VW. Why is always this way? When too good to be true turns out to be too good to be true.
Apparently this is early days and there is more to reveal and I was genuinely waiting for the dust to settle to see if in fact this was just another “salad oil swindle” recovery in the making.
Here is the link to Hempton:
http://brontecapital.blogspot.com/2015/11/channel-stuffing-by-valeant-in-europe.html?spref=tw
and to the Slovenian news article:
http://www.finance.si/8838444/Slovenia-involved-in-Valeant-scandal
If you enjoy the content at iBankCoin, please follow us on Twitter
You are starting to sound like a mouthpiece for the short side.
Grimace, there is no bear or bull side to it, only the right side. I would have preferred to have simply waited for the dust to clear and gone long with the expectation of unimpaired value at a discount, or just simply price trend that looks good on a weekly basis. Remember McDonald’s in the wake of Mad Cow, or Apple when it was selling for less than cash? Or Amazon Euro denominated bonds almost 15 years ago? Those were bargain deals that did well. I have no dog in this “fight” and here’s the thing about markets. It’s not a fight, it’s price discovery struggling to match up with the long term reality of whether or not the enterprise is viable. I don’t cheerlead for down or up, I watch, wait and if it suits my bankroll, time frame and circumstances I trade. It’s just another idea to watch. You and I may well have forgotten about this ticker and moved on to some other new thing. As for this piece, I understand that guy is a lightning rod for emotional reactions but that is not the priority for traders and investors. The priority is to protect our capital for ourselves and our loved ones, and make a profit if possible to compound that capital. I wish you luck and hope you do well.
It’s just awfully coincidental how this new “story” about a European pharmacy and channel stuffing emerges right as the stock is beginning to show signs of life the past couple of days. Looks like this time it backfired on the short and distort crew.
Just my .02 cents.