Bill Ackman Apologizes To Investors For Multi-Billion Dollar Mistake in Valeant
Earlier this week, the hedge fund run by Bill Ackman, Pershing Square Capital Management, circulated an annual letter to its investors. This annual report quickly made its way to the media.
In the letter, Ackman apologized for Valeant Pharmaceuticals, which he called a "huge mistake". Ackman went on to say that he was "deeply and profoundly sorry" for taking such a big loss, which has been estimated at approximately $4 billion.
Ackman, who is known for taking very large positions in companies, threw in the towel on Valeant earlier in the month, as he sold out the rest of his firm's share in the pharmaceuticals firm. This news surprised many who figured that Ackman was too publicly married to the stock to do anything but ride it to the very bottom. Ackman, who was previously the firm's biggest cheerleader, decided that he had had enough and ejected from the company. Some believe that this is terrible news for the company, as it likely signals that Ackman believes that Valeant is a lost cause. Others think that Ackman's continued involvement in the company was toxic and that his exit could mark a new beginning.
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Ackman said that he took "100%" of the responsibility for the bad trade. He did, however, point some fingers in the letter, stating that he misjudged the management team that was in place when he first started accumulating shares in the company, and that Valeant "substantially" overpaid for Salix.
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Thanks to some very acrimonious battles over the years, Bill Ackman has developed quite a reputation for himself on Wall Street.
There were many that cheered as shares of Valeant plummeted. Shareholders of Herbalife, which Ackman has savagely attacked over the years, were particularly delighted by Ackman's troubles. Herbalife is another position that has not worked out for Ackman, as he has continuously stated that the company is a long-term zero.
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Will the 50 year-old hedge fund manager change his ways going forward? This seems very unlikely.
Source: Reuters.com - Ackman Apologizes for Valeant Losses, Calls Bet a Mistake
Filed under: General Market News
