Valeant Falls as Investor Left Says He’s Sold It Short Again

  • ‘Small short position, nothing substantial,’ Left says
  • Stock down as much as 6.3 percent after TheStreet.com report

Valeant Pharmaceuticals International Inc. fell Wednesday after investor Andrew Left said he’s taken a new short position in the company.

The shares fell as much as 6.3 percent, reversing gains earlier in the day, and were down 5.6 percent to $21.91 at 3:19 p.m. in New York. Left runs the firm Citron Research, and his short position was first reported by TheStreet.com.

“I have a small short position, nothing substantial, it’s been a few weeks,” he said in a telephone interview. In the interview with TheStreet.com on Wednesday, Left was quoted saying that he thought the stock would eventually be worth nothing.

A representative for Valeant declined to comment.

Left was an early critic of Valeant, accusing the company of fraud and misconduct last year. Calling it a “pharmaceutical Enron,” he has said he took a bet against the company. In May, after the stock’s long plunge, he said he was betting on the stock to rise and owned the shares.

Valeant has lost more than 90 percent of its value since August, as the company has overhauled its strategy, cut its forecast, changed management and been investigated by Congress, regulators and law enforcement.

For a Bloomberg Intelligence primer on Valeant, click here.

Sequoia Losses

Ruane, Cunniff & Goldfarb, manager of the Sequoia Fund and once Valeant’s largest shareholder, said the $4.8 billion mutual fund sold its Valeant shares last month. Valeant, which once accounted for more than 30 percent of the Sequoia portfolio, was no longer a holding by mid-June, the firm told investors Tuesday.

Valeant’s plunge led to a 7.3 percent loss at Sequoia Fund last year, spurring redemptions by investors. The slump has continued, with the fund declining 13 percent in the first half of the year, compared with a 3.8 percent return for the Standard & Poor’s 500 Index.

Former Valeant Chief Executive Officer Michael Pearson also recently has sold about $14 million of the drugmaker’s shares. Pearson sold $8.23 million of the stock at about $20 a share on July 5, according to a filing with the U.S. Securities and Exchange Commission posted Tuesday. Under the name John Pearson, and identified as “former CEO” in another filing, he also sold $5.79 million worth at $20.07 a share on June 30.

“Recently, Mr. Pearson exercised certain options that were due to expire,” Valeant said in a statement posted online Wednesday. Pearson is required to hold at least 1 million shares of the company for two years following his departure, and “continues to retain a significant ownership position,” the company said.

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