VRX: Hedge Fund Hotel Wrecking Ball
The big name hedge funds are finally dumping Valeant (NYSE: VRX). Better late than never.
In a rare interview with Harvard Business School that was published online earlier this month, (it has since been taken down) value investor Seth Klarman spoke at length about his investment process, philosophy and the changes value investors have had to overcome during the past decade. Klarman’s hedge fund, the Boston-based Baupost has one of Read More
Brave Warrior dumped 4.2 million Valeant shares, two-thirds of its stake. At one point they had a quarter of their fund in the pharma company and had been owners for four years. Braham Capital dumped 8.2 million shares after having held Valeant shares for five years and making up a third of the fund’s portfolio at one point. Senzar Asset Management sold its 1.3 million shares. Other funds selling out of their stakes include JANA Partners, Lone Pine Capital, Iridian Asset Management and Viking Global.
VRX – There are some ballsy funds out there, nonetheless.
Most notably, David Tepper’s Appaloosa Management, which added a $25 million Valeant position last quarter. Others joining Appaloosa in the bottom feeding include Farley Capital (up its stake by 40%) and Okumus Fund.
More to come later this week on what hedge funds are buying and selling when we put out the Quarterly Activist Newsletter. Subscribe today get it right in your inbox, as well as access to our past reports. Read more about it here and check out the new yearly plan.
But one of the biggest Valeant bears has finally come full circle.
Andrew Left, who runs Citron Research, put out a short report on Valeant in October, which put a bright spotlight on the pharma company. In that report, Left called Valeant Enron-like, inflating sales with fake revenues. Left is now long the stock, looking for a bounce, noting that Valeant’s stock is priced like it’s going out of business. The stock has tumbled some 90% since peaking in fall 2015.
This fall has taken Bill Ackman’s Pershing Square to the woodshed. His fund was down over 20% in 2015 and is already down 18% this year.
Don’t forget that we rolled out the yearly plan for the Quarterly Activist Newsletter this week. Check out the discount.