Valeant Pharmaceuticals got hammered on Monday, and it’s bad news for a bunch of hedge funds.
The embattled Canadian pharma company confirmed its part in several ongoing investigations. They include ones by the US Attorney’s Offices for Massachusetts and the Southern District of New York, the US Securities and Exchange Commission (SEC), and Congress.
The stock collapsed 18.44%, or $14.87, to close at $65.78 per share. The stock hit a 52-week low on Monday of $63.75.
The traumatic start to the week extends a tough run for Valeant, which has been sliding since late 2015 because of scrutiny in Washington, DC, over drug-price increases and accusations from a short seller.
The stock has been a hedge fund darling. According to Goldman Sachs’ most recent Hedge Fund Trend Monitor, Valeant ranked No. 26 on its list of the stocks that ‘matter most’ to funds. Valeant had fallen off Goldman’s list amid the stock’s sell-off in Q3, but it reentered the ranking in Q4.
This post was published at David Stockmans Contra Corner on March 1, 2016.
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