Activist Investor Bill Jackman has just sold all his 27.2 million shares in Valeant Pharmaceuticals.
William Albert Bill Ackman has abandoned the ship of Valeant Pharmaceuticals International Inc. The drug maker has created a controversial relationship with the public. This cost the company a stained public image and expensive defense strategies for anyone who was in business with the pharmaceutical company. The activist investor was the reason behind a miraculous turnaround of the firm. However, the business seemed to become demanding enough for Bill Ackman to give up on it finally.
Valeant Pharmaceuticals Shares Plummeted 90% Since 2015
The company Pershing Square Capital Management, which is under the ownership of activist investor Bill Ackman, has just sold all of its stake in Valeant Pharmaceuticals. The company went to great length back days to acquire this asset. The board had to apply aggressive strategies to grab them right from the fingers of its competition. At the same time, the firm received an overwhelming wave of criticism. Authorities and public questioned the drug pricing.
In 2015, Valeant’s stock was at dizzying heights of a value of $257. However, after just two years of business activity, the shares plummeted to $12.11 on Monday. As a consequence, investors in Pershing Square lost a total of $4 billion. Mr. Ackman was more affected by this situation than others. Besides being an investor, he also spent a lot of time at the helm of the pharmaceutical company as a board member. He also felt pressure from his own investors regarding the holding.
Sources familiar with the matter stated that Pershing Square Capital Management offered all of its 27.2 million shares in Valeant Pharmaceuticals at a low price of $11 each. By comparison, the 2016 letter of the hedge fund recorded average purchasing price of $196 a share only two years ago. The statement on behalf of Bill Ackman announced that the activist investor would remain further on the board. On the other hand, he is not going to stand for the upcoming election.
The Reason Behind the Decision of the Activist Investor
“At its current market value, the Valeant position represented 1.5% to 3% of the various Pershing Square funds; however, the investment required a disproportionately large amount of time and resources.” the company stated.
Bill Ackman expressed his concern regarding this pharmaceutical company for a long time now. Last year, he acknowledged his regret of ever investing in Valeant. It was only the hope that he can still address the issue that kept him from selling his shares right away. His decision is irreversible. His comment on the recent events explained that not even a doubled stock would have had the power to bring any benefit for Pershing Square.
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