Valeant Pharmaceuticals (VRX) stock fell 12.23% on Tuesday, adding to the company’s sharp 30-day decline of 33.48%. The company has lost over 80% of its value in the trailing 12 months and as much as 90% of its value since August 2015 highs.
The company’s latest woes come after Bill Ackman, a defender of the company and investor, announced that he will leave the company’s board. Ackman also announced the sale of his entire stake in the company.
Tuesday marks the largest intraday loss the company has suffered since May 2009.
Ackman Exit
Analysts state that Ackman’s departure is seen as a vote of no confidence in the company. Ackman was the company’s largest shareholder. Analysts warn that Ackman’s departure may be a sign that the company’s problems will only get worse.
Ackman remained a supporter of the company for three years. Rumors suggest that the investor may have lost $2.8 billion in 2016 just on shares Pershing Square Capital Management, Ackman’s company, owned at the end of 2016. Total losses for Pershing are likely much higher, near the $4 billion mark.
Valeant Pharmaceuticals (VRX) secured a lender consent to refinance and amend the company’s credit agreement last week. The news helped the company rally last week, as the leveraged market allows the company to refinance and extend the maturity of debts nearing $30 billion.
The company will refinance with new loans and bonds. The deal allows three loans to be pushed back to 2022 maturity. A high-yield bond increase went from $2.5 billion to $3.25 billion last week as investors gained confidence in the company.
The company raised $2.12 billion for the sale of three skincare products in January.
Ackman’s departure from the company is a warning sign to investors hoping for Valeant’s operations to turn around. The company’s downtrends are expected to remain. Ackman’s attempt to save the company lasted for 18 months.
Anthony Young
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