Ackman bails on Valeant, losing $3 billion

Carl Icahn Bill Ackman

Following the market's close on Monday, Pershing Square Capital Management's Bill Ackman told CNBC that the firm officially exited its position in Valeant Pharmaceuticals (VRX).

In after-hours trading Monday, it dropped nearly 10 percent further to $10.91. We make no recommendation that the securities of the companies profiled or discussed in on our website should be purchased, sold or held by investors. Kistler Tiffany Companies LLC now owns 5,567 shares of the specialty pharmaceutical company's stock valued at $137,000 after buying an additional 2,719 shares during the last quarter. The stock is now moving above its 20-Day Simple Moving Average of -17.18% with the 50-Day Simple Moving Average of -17.18 percent.

Revenues in the quarter fell 13% to $2.4 billion, versus $2.8 billion in the same quarter of 2015. Icahn last week increased his stake in Herbalife by a few hundred thousand shares, which took his stake from 24% to almost 25% in the company.

Pershing Square also invests with General Growth Properties Inc. and Restaurant Brands International Inc.

Analysts from BMO think the sale by Bill Ackman is bad news for Valeant Pharmaceuticals shareholders. Carl Domino Inc acquired a new stake in Valeant Pharmaceuticals Intl during the third quarter worth $225,000. In addition, Renaissance Technologies bought 2.91 million Valeant shares, Barclays Plc 1.31 million shares, and Millennium Management 1.25 million shares during the fourth quarter. The company priced a secondary stock offering of 30 million shares at $0.50 a share this morning. The company said on Monday that it was expanding into the home services market. (NYSE:VRX). At the time of writing, the First Call consensus price target for the company is $19.81. Monitoring the stock price relative to its moving averages may be helpful when trying to measure future share movement. During the period, Ackman supported the company's growth prospects and its intention of buying more companies to stimulate growth. The stock has returned -82.4% over the a year ago.




The stock as of last trading session moved 6.60% up from its 52 week low and was -82.81% behind its 52 week high.

"The hits just keep comin' for Valeant", Gimme Credit LLC bond analyst Vicki Bryan, who advises selling the bonds, said in a note to clients.

Currently, the company has SMA200 (200-day simple moving average) of -41.35 Percent.

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.

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