Well, well, what do we have here? Surprised nobody has posted on this subject as it seems to be all the talk in media-land... I'll start then
Valient has been in the news in Canada for numerous years. I mentioned it on this site when it was called Bioval and traded somewhere around $20 ( up from around $10 ). Turns out, it continued to trend all the way up to $340.
Not true, there is a thread here http://www.elitetrader.com/et/index.php?threads/i-thought-vrx-had-roaches-this-is-insane.295302/ with the last post less than 30 hours before you started this thread. .
Correct me if I'm wrong but it seems that the VRX short case is -VRX did something wrong through Phillidor or another speciality pharma -Phillidor will be heavily fined -This fine will flow through Phillidor and VRX will have to pay. Because they are levered 4-1 they are in huge trouble Its a series of low probabilities events that all have to happen. First what Phillidor did has to be illegal (not just aggressive), who to trust, the army of lawyers VRX has or shorts with 0 legal training? Then it must lead to a big fine (I mean really big because its just a one time thing, one thing charges should not impact the valuation of a stock significantly unless they are huge and threaten liquidity/business model). Then the Phillidor structure will have to be deemed invalid so VRX becomes liable for the fine (which the army of lawyers at VRX says they do not think will happen) All of this will have to happen, if any of them doesn't, then the stock is a buy. This thesis might have been good at $160 but at $110, frankly, I just think its ridiculous. Price matters
Daal, I pretty much have the same reasoning as you. I'm stupefied that price seems to be holding (down) here, as I will add the following observation: There is no illegal activity but rather clear evidence of an extremely well lawyered up compliance-savvy executive suite. There IS evidence of aggressive marketing etc. Did we just become a communist society or are we still capitalists? If the later, what is the problem here? 'Cos I'm seeing things you would want in an investment, not vice versa. Also Mr. Left of Citron has indeed had many successes, but unless I am mistaken he is very much an opportunistic trader and his M.O. is to publish his negative pieces and take advantage of the ensuing price drop, ergo COVER his short. I get the feeling he is at this point milking the spotlight to build his persona in favor of future campaigns; but has closed his position that most likely has paid off by now beyond his wildest dreams. I also suspect that once this blows over the VRX attack will largely discredit him and his reports will have more muted effects. What really strikes me is the way the hype has worked itself into a frenzy here - Starting to hear A LOT OF comments that paint Valeant as somehow positively being engaged in illegal activity, of no merit or substantiation whatsoever.
I agree with you on Citron. His business model seems to be quite misleading to his followers. I'm willing to bet he covers the vast majority of his short right after the report (I mean, like 1-20 min after). He then holds a small portion so he can claim to be 'still short' and give the illusion of having interests aligned with his readers. Truth is that he has little or no skin in the game. I suspect this because has had some many stocks that went to the moon (like Zillow, Questcor) that he would be broke by now if he was a long-term shorter. He also 'doesnt talk about his trading', thats cause he knows it will make him look bad to admit he covers almost everything in the first 5 min candle