Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  News  >  Business Leaders  >  All news

Business Leaders

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesHot NewsMost Read NewsRecomm.Business LeadersCalendar 
HomeAll newsMost read newsBusiness Leaders Biography 
Birthday : 11/30/1965
Place of birth : New York - USA
Biography : Mr. William A. Ackman is Chairman at The Howard Hughes Corp., Chief Executive Officer at Pershing Sq

William Ackman's Valeant Loss Is Short-Sellers' Gain -- WSJ

share with twitter share with LinkedIn share with facebook
share via e-mail
0
03/20/2017 | 07:48am CEST
By Ben Eisen 

William Ackman may be nursing losses over his investment in Valeant Pharmaceuticals International Inc., but short-sellers who bet against the company's stock are riding high.

They are up $2.8 billion since the stock peaked in August 2015, according to S3 Partners, a financial analytics firm. Shares have cratered by 96% to near $11 this week from their record high of $262.52.

Mr. Ackman's Pershing Square Capital Management LP sold its 8% stake in the company, taking a loss of about $4 billion, The Wall Street Journal reported this week. It capped a turbulent ride for the investment, which Mr. Ackman once compared to Warren Buffett's Berkshire Hathaway Inc. He predicted the shares could climb to $330.

Valeant had been a Wall Street darling known for buying up smaller rivals and jacking up drug prices until mid-2015, when questions surfaced about its accounting and business practices. Mr. Ackman took an active role in trying to restore investor confidence in the company, helping replace most of the Board of Directors and hire new executives to helm the firm.

A spokesman for Pershing Square declined to comment beyond a press release on its share sale. A spokeswoman for Valeant did not immediately return a request for comment.

Those who bet against Valeant -- and against Mr. Ackman -- made a hefty profit each year since the hedge fund manager began amassing his shares in 2015. Their total returns have amounted to 343% after the cost of financing short positions, according to S3 Partners.

Short sellers typically bet against a stock by borrowing shares from a securities lender and selling them. They look to buy back shares at a lower price and return them to the lender, hoping to collect the difference as profit. If the share price drops off dramatically, as happened with Valeant, short sellers can profit handsomely.

Still, short interest seemed to decline ahead of some of Valeant's biggest stumbles over the past few years, meaning those investors left some potential profits on the table, according to S3 Partners.

"The shorts probably didn't time Valeant as well as they could have," said Ihor Dusaniwsky, head of research at S3 Partners.

The number of Valeant shares being shorted has climbed as the stock price has fallen, reflecting, in part, the need to keep selling more shares short to maintain the same dollar amount of exposure. At the same time, the value of those shares has fallen, which means there's less money in play.

At the beginning of 2016, there were just over 12 million shares sold short, worth $1.1 billion. By mid-year, that had turned into 30 million shares, worth $609 million. By the end of 2016, that was 29 million shares, worth $422 million.

Recently, the value and number of shares sold short has been on the rise, particularly around the time Mr. Ackman exited his stake. Short interest climbed to 52 million shares, worth $583 million.

Evidently, some investors still see shorting Valeant as a profitable trade.

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news about William Ackman 
05/10 WILLIAM ACKMAN : Ackman has a winner that is up 30 percent but will not name names
05/08 WILLIAM ACKMAN : Ackman pitches Howard Hughes, citing management and real estate locations
03/30 WILLIAM ACKMAN : Ackman apologizes for Valeant losses, calls bet a mistake
03/23 WILLIAM ACKMAN : Ackman's Pershing Square Holdings seeks London listing
03/20DJWILLIAM ACKMAN : William Ackman's Valeant Loss Is Short-Sellers' Gain -- WSJ
03/15DJWILLIAM ACKMAN : Valeant Slides on Ackman's Exit -- WSJ
03/14DJWILLIAM ACKMAN : William Ackman's Pershing Square Sold Stake in Valeant -- Update
01/27 WILLIAM ACKMAN : Ackman's fund mum on names of latest investments
2016 WILLIAM ACKMAN : Chipotle shareholder urges Ackman to recruit new board members
2016 WILLIAM ACKMAN : Ackman's fund asks SEC for exemption after campaign donation
2016DJWILLIAM ACKMAN : Top Equities Stories Of The Day
2016DJWILLIAM ACKMAN : Chipotle, Ackman Near Settlement Over Company's Board
2016 WILLIAM ACKMAN : Ackman
2016 WILLIAM ACKMAN : Activist Ackman calls Chipotle relationship 'extremely constructive'
2016 WILLIAM ACKMAN : Chipotle, Ackman talks intensify with confidentiality agreement
1  2  3  4  5  6  7  8  9  10Next

Advertisement
Most Read News 
05/22 JAMES HACKETT : Ford names Hackett as CEO to tackle car rivals, Silicon Valley
05/17DJROBERT IGER : Disney's Iger Isn't About To Sign Off -- WSJ
05/16 JAMIE DIMON : JPMorgan's Dimon defends Trump advisory role, deregulation
05/17 LAKSHMI MITTAL : ArcelorMittal warns of legal action over Bosnia iron ore mine sale
05/19 MASAYOSHI SON : Dealmakers aplenty, SoftBank's Son looks for wonks
05/18DJRUPERT MURDOCH : Former Fox News Chief Roger Ailes Dies at Age 77 -- Update
05/16 OLEG DERIPASKA : Deripaska's group bets on improving aluminium, Russian outlook
More news

Popular Business Leaders 
Paul Achleitner William Ackman Bernard Arnault Max Azria Mary Barra Jeff Bezos Lloyd Blankfein Yannick Bolloré Thomas Buess Warren Buffett Gary Cohn Michael Dell Ralph Dommermuth David Einhorn Klaus Engel Mark Fields Laurence Fink Carlos Ghosn Peter Hancock David Henry Carl Icahn Robert Iger Arnaud Lagardère Jack Ma Sergio Marchionne Marissa Mayer Oscar Munoz Rupert Murdoch Elon Musk Peter Nicholas Ferdinand Piëch Georges Plassat Hasso Plattner Wolfgang Porsche Giuseppe Recchi Wolfgang Reitzle Urs Rohner Kasper Rorsted Wilbur Ross Charles Schwab George Soros Rupert Stadler Bernard Tapie Johannes Teyssen Tidjane Thiam Axel Weber Thomas Wilson Dieter Zetsche Mark Zuckerberg
A-Z Business Leaders