Somebody give Bill Ackman an aspirin.
Better make it a double.
The embattled hedge fund mogul saw the value of his investment in Valeant Pharmaceuticals fall by $766 million on Tuesday after shares of the troubled company fell by 51 percent in the wake of three troubling disclosures:
- First-quarter profits will be in the range of $1.30 to $1.55 a share, down from a previous forecast of $2.35 to $2.55, and revenue in the three-month period will total $2.3 billion to $2.4 billion — down from a previous estimate of as much as $3.1 billion.
- It had a surprise fourth-quarter loss of $336.4 million, while adjusted earnings came in at $2.50 a share, below expectations.
- If it doesn’t file its already-delayed annual report by April 29, it might face an “event of default.”
Ackman’s Pershing Square hedge fund owns 21.9 million shares, or 6.3 percent, of Valeant. On Tuesday, the company’s shares closed at $33.54, a near four-year low, and are off 83 percent in the past year.
For Ackman, the Tuesday massacre continues 15 months of bad news. Pershing Square was down 18.6 percent in the first two months of 2016 after cratering 20 percent in 2015.
The investor, to “protect and maximize” his investment, will take a “much more proactive role” in the once highflying company, he said in a letter. Pershing last week appointed Vice Chairman Steve Fraidin, 76, a veteran mergers lawyer, to the Valeant board.
In addition, Ackman said that he is confident banks would give Valeant a waiver on any possible violations of its debt agreements. He reiterated his belief that the company is undervalued.