# Valeant Pharmaceuticals (VRX.TO, VRX)



## humble_pie

i can't believe there's no existing thread on this formerly canadian pharma. But i searched & there wasn't.

does anybody hold this ? i've held vrx since its previous biovail incarnation. Stk has gone to the moon. From 11-12 to north of 60. Every year i sell 200-300 shares, then buy em back in a campaign to gradually increase the cost base ... so that capital gains arising from an eventual disposition will not be too painful.

co is long past its old biovail welbutrin days, now focuses on neurological products, pipeline is promising but earnings nowhere support share price. There are analysts who won't touch VRX because they see a funny story, funny as in bizarre, distorted & possibly alarming.

some class vrx as a canadian pharma but it is not. The overtaking company in the alleged "merger" of biovail & US valeant was valeant, by far the bigger of the 2 & a relentless acquisition addict. Valeant took over toronto's sleepy biovail because it wanted to acquire - for corporate taxation purposes - biovail's nominal offshore head office in bermuda.


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## Ihatetaxes

We own this stock and its had a great run and up to new 52 week highs today!!


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## Ihatetaxes

Up 4% this morning on another aquisition. Still holding and still smiling.


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## humble_pie

Ihatetaxes said:


> Up 4% this morning on another aquisition. Still holding and still smiling.


still holding here but it's too good to be true.

let's list the cons:

- PE north of 250.

- stories about cowboy acquisition strategy usually do not work out well in long run because cowboys are not good at running a peaceful & productive pharm

anything else?


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## lonewolf

seasonallity of stock will run out of steam after week 16

free monthly & weekly seasonality power bar @ blashing.com has the stock running ot of strong seasonality just after week 16

Jan +3
Feb +6
Mar 0
April +3
May 0
June +1
July -1
Aug 0
Sept +2
Oct 0
Dec +4


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## humble_pie

wolf something practical would be nice each: not latest oracular utterances from zarathrustra

back to basics, does anybody know what could be wrong w valeant, aka why we should sell now while stk is sky-high?

apart from the fact that the american CEO of VRX is seriously overweight which was a reason i got out of RIM/RIMM when i saw what was happening quite long time ago to plumpie puffster mike lazarides.


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## Ihatetaxes

Seems like all the aquisitions are derm and athetics, drug classes not as controlled by our lovely government and an area of growth for GP's looking to increase income with patient paid drugs. Also good area of growth with aging weathy boomers who want wrinkles reduced and have the cash to pay $700 every two months for injections into their faces.

As for a fat CEO I never trust a skinny chef and maybe that can apply to CEO as well.


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## Ihatetaxes

Great day to be a shareholder! http://www.google.com/finance?q=TSE:VRX&ei=gc0SUaiVOsS6qgHVSA


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## humble_pie

taxes this stock was $11-12 not that long ago, back in the biovail day. There has to be something going on with this story. Stocks don't go to the moon like this for no reason.

maybe VRX does have good prospective market of rich boomers who'll personally pay for anti-ageing maybe even anti-alzheimers products that health care systems won't pay for. Maybe VRX is about to buy bausch & lomb. Goody for them. But i still don't see how the fundamentals are justifying this moon rocket.

hmmnn the real story might be one of manipulation ... no sign of this yet ... but i'll be looking out for a good story ...


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## Ihatetaxes

Up another $6 this morning...


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## Toronto.gal

And hp is laughing all the way to the bank! :encouragement:

Hmmm, I'll be paying more attention to 'increasing the cost base' [with other stocks]... or maybe not, now that I've hired Harold to take care of the tax planning isssues [ie: finding dogs]. :chuncky:


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## humble_pie

just grumbling away quietly here in my corner, holding my shares gingerly like Eeyore in winnie the pooh

hmmmn i think the real story might have something to do with bermuda head office, offshore can be racy


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## Compounding1

Have you done a thorough reassesment of the stock lately? If the fundamentals are no longer the same from when you purchased and it makes you feel uneasy then keep taking a profit like you're doing and maybe more so.You know what they say... Be fearful when others are greedy and greedy when others are fearful! And no one ever went broke taking a profit


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## Ihatetaxes

Well, I held this stock for all of 2013 and its the last individual stock I own but hard to complain about 213% return and now up 10% this morning.


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## Toronto.gal

^ Fantastic stock pick, and return for mentioned period.

Congratulations!!


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## Ihatetaxes

Article in the Globe today and while I don't disagree with the author, I am also interested in hanging on a while longer. http://www.theglobeandmail.com/glob...ambitions/article16239455/#dashboard/follows/


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## humble_pie

i still have all my shares, except for the 50 i donated to a charity recently.

but i've been a somewhat skeptical shareholder for a long time. It's my spidey sense. There's too much potential for offshore "business." This is why valeant of california bought dumpy little biovail of mississauga. To acquire the caribbean head office which biovail happened to possess. Apparently there are US laws that presently restrict US corporations from moving offshore, unless they have already done so.

my VRX shares have risen something like 1100%. I don't mind the $125,000 paper capital gain. But i'll be watching the ongoing story with interest. 

here's a clue about what's looks awry with this company:

“Unless you aim high, you don’t achieve high,” [VRX ceo Michael] Pearson said. “*How we get there, we can’t say at this time*.”


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## My Own Advisor

hp is going to travel the world on this stock....


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## Ihatetaxes

$165 today.


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## humble_pie

ow ow ow

i still have all my shares

i wonder about all those business centres in the balkans, though. Plenty funny money in the balkans. I mean why do they need marketing centres & manufacturing facilities in all of those east european states?


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## Ihatetaxes

http://www.theglobeandmail.com/glob...d-opinion/article17472555/#dashboard/follows/


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## humble_pie

woo hoo the shorts are out

https://businessincanada.com/2014/03/06/jim-grant-bearish-case-on-valeant-pharmaceuticals/

please be so kind as to note that i said it first. When the crash occurs, the nodal point is going to be the balkan story.

for all we know, is why vladimir putin wants his black sea port and eat crimea too.


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## Ihatetaxes

Just sold 1/3 of our position at $142.10 US (bought at $39 in 2011). Will likely sell another third in the coming days...


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## the-royal-mail

This stock has done really well over the past week or so. Currently $146.06 or up 5.32% today alone.


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## Ihatetaxes

Over $200! I'm still holding a chunk after selling 2/3 of our holding in 2014.


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## Ihatetaxes

Up 13% today on big announcement of Salix purchase.


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## Flash

Surprised no one else posted here since Feb... This thing is now almost 350$. Who thinks will hit 500$?


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## Butters

Not me, I think they have another year to be stagnant to grow into their current PE
They are so big, they can't really find any large acquisitions to boost them


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## CPA Candidate

This company is just a giant financial engineering (finance) experiment, much like CSU. The growth will stall and the multiple will collapse at some point but the massive leverage will still be there.


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## jargey3000

what's the current thinking on this one - "going forward", as they say?


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## CPA Candidate

CPA Candidate said:


> This company is just a giant financial engineering (finance) experiment, much like CSU. The growth will stall and the multiple will collapse at some point but the massive leverage will still be there.


The collapse came quicker than I thought and for a combination of reasons. Now watch all the analysts and portfolio managers backpedal out of their recommendations.

This is the 5th largest holding of XIC and was the biggest market cap on the TSX a couple months back.


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## Butters

interesting, you think its done for... Jason Donville just recommended it again yesterday

Valeant just issued a press release saying the only charge for the drugs when they are handed to the patient


Concordia CEO was just on BNN said he would be buying CRX.to if he wasnt on blackout restrictions... extremely cheap... and this price drop in the sector creates opportunity


both seem to be turning around a bit now.... i bought both, will see how they pan out


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## godblsmnymkr

SheaButters said:


> interesting, you think its done for... Jason Donville just recommended it again yesterday
> 
> Valeant just issued a press release saying the only charge for the drugs when they are handed to the patient
> 
> 
> Concordia CEO was just on BNN said he would be buying CRX.to if he wasnt on blackout restrictions... extremely cheap... and this price drop in the sector creates opportunity
> 
> 
> both seem to be turning around a bit now.... i bought both, will see how they pan out


sounds like gambling and not investing.
donville sounded very very nervous stammering all over the place.


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## humble_pie

would you believe an "analyst's" report that looked & read like this?

http://www.citronresearch.com/wp-content/uploads/2015/10/Valeant-Philador-and-RandO-final-a.pdf
.

would you believe this man? he's andrew left, the short-seller who authored the scandal report on valeant in his lemon-alert publication.
.










.


imho the valeant story has been building for years. Me i launched this thread with doubtful warnings in january 2013, nearly 3 years ago. By march/14 i was posting double digit warnings. This was long before certain other parties climbed on the bandwagon.

http://canadianmoneyforum.com/showt...s-(VRX-TO-VRX)?p=227809&viewfull=1#post227809


these days the company is functioning as a scapegoat & probably does not deserve the pummelling it's receiving. When one sees comic book shorts like monsieur citron shouting their heads off, one can hazard a guess that the shorts have had their day (next Q: was andrew buying or had he permanently left the building?)

i still believe the real story is not the obscure california court filing or the so-called phantom billing. The real story looks to be far away, almost on the other side of the planet.


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## doctrine

Not surprised to see Valeant cut down to size. Royal Bank has nearly as much net profit as Valeant has revenue, yet Valeant was valued higher? And, Valeant has never and probably will never pay a dividend? Ugh. The whole healthcare/biotech sector needs to be cut down to size and start returning capital to shareholders. 

Valeant was doing so well, people who don't even own stocks were asking me "Should I buy Valeant?" If it's general office talk, that's a real bad sign. It was August, btw. Not a lot of people asking anymore. Other than to comment on how they're happy they didn't buy any. The unfortunate part is that it was such a big part of the TSX index, so most people had a piece of it somehow.


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## humble_pie

^^

is it not a bit easy to cry wolf after the fact though.

& valeant did pay a USD 1.00 dividend at the time it took over biovail.

it's true all the funds & pension plans will be hit. Almost without exception. It was astonishing how bullish most of the analysts were. There were only a tiny minoritiy who cautioned seriously on debt levels.

however i for one believe the fat lady has not yet sung on valeant. This company is not yet done, imho, although andrew left have been true to his name & he may have vamoosed with his short-selling booty.

i confess i had these jan $135 puts in VRX. They were the remaining half of a put spread in US LEAPs that i'd put on in 2013. I'd closed the opposite half of the spread in 2014, but the long leaps were worthless when valeant was towering north of 275. I was keeping em as leftovers for an end-of-year strategy. Worst case scenario, the VRX puts would have been a total loss. In my mind i'd pretty much written em off.

but today i was able to sell em for a beeyootiful price.


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## doctrine

I've never owned nor recommended a non-dividend paying healthcare stock..probably was more vocal about VRX in real life. My portfolio lagged for the first 7-8 months of the year for lack of health care, but all of a sudden is looking a lot better  All of those big funds (hedge too) are suffering now on what I think is mostly speculation and momentum gone bad. In the long run, valuation, earnings and dividends pay off. None of which VRX had, or many others in the sector, in my opinion.


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## humble_pie

doctrine said:


> I've never owned nor recommended a non-dividend paying healthcare stock ... My portfolio lagged for the first 7-8 months of the year for lack of health care, but all of a sudden is looking a lot better



that's great, i'm happy for you!

there's been a fair amount of talk in cmf about dividend vs non-dividend payors, i didn't know you were so keen on dividends. 

not to rehash the debate, but on a scale of 0 (totally avoid dividends) to 10 (highly favour dividends), i'm wondering where would you place yourself.

i'm lowish, around the 5 mark, because high dividend earners do face obstacles of their own & anyhow i can replace dividends with option sales that are, for me, more tax-favoured. In non-registered accounts, for example, options that replace top-taxable foreign dividends are certainly desirable.


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## el oro

doctrine was a dividend blogger in a former life so I would guess at LEAST a 10.

As much as I don't care for dividends (I'd be a 1 or 2), they especially don't make sense in high-growth companies in high-growth industries.

This sector wide downturn is an opportunity, imo. Babies and bathwater and all that. Avoid the ones embroiled in escandalo and there's still plenty to choose from. High-growth, low-yield companies in other sectors remain at or near their all-time highs.

Dividend or no-dividend, you can do well either way. It seems shorting and releasing fraud accusations works best these days.


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## CPA Candidate

Andrew Left is a controversial figure and has been wrong before, but not the only one raising concerns. Veritas Investment Research which takes an accounting-based research approach (and is independent) has rated VRX a sell for years, citing complex and aggressive accounting and lack of clear disclosure. A lot the these guys were trained in auditing, got a CA and then got their CFAs. Most equity analysts on Bay Street are finance-trained and probably don't understand much of the underlying accounting going on and haven't spent a day auditing. Auditing is basically investigative work.

Reading the accusations by Citron and the responses from VRX, I cannot reconcile the story. VRX appears to say that these specialty pharmacies are not owned by them (an option to purchase) yet says they consolidate them. That doesn't make any sense to me.

Right on cue, a BMO analyst dropped his target for VRX from $265 to $141. I'd guess he was in the dark as much as all the people his firm recommended the stock to. All analysts loved VRX because they smelled deals in the air.


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## HaroldCrump

humble_pie said:


> would you believe this man? he's andrew left, the short-seller who authored the scandal report on valeant in his lemon-alert publication.


Why do all these short sellers look stoned & zoned out?

Remember Carson Block, who brought down Sino-Forest?
He had a cardboard demeanor and spoke like a zombie.

*Here is Andrew's appearance on Bloomberg a few mins ago*.
At least, he can talk in a normal, animated manner.


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## HaroldCrump

Here are the two full interviews with Andrew Left

*Bloomberg*

*BNN*


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## HaroldCrump

Oh boy, that BNN interview got quite testy...Andrew Left is not a pleasant individual at all, LOL


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## humble_pie

HaroldCrump said:


> Oh boy, that BNN interview got quite testy...Andrew Left is not a pleasant individual at all, LOL



doesn't he remind you of a couple parties in the forum though each:


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## humble_pie

HC alas your bloomberg link keeps returning a server error message, but the BNN links works in my browser.

the BNN interview shows andrew left working himself into such a rageaholic fury that he appears to crucify himself with nothing more than mouth foam.

for example, the interviewer asks why he chose a $50 price target in VRX? 

andrew foams back that he has no reliable facts, therefore he could have chosen a price target of zero for valeant. "You could choose whatever [price] you want," he bubbles.

or was that squeaks? perhaps andrew left should invest his recent short-selling booty in a really good defence lawyer ...


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## Eder

I thought I read Ackerman was a big buyer yesterday and now 2nd largest share holder of Valeant. I don't /won't own but I'm sorry some here got hosed and hope the stock finds it's feet.


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## humble_pie

lol we have such vigilant securities authorities, ever working to protect investing canadians from lies, scams, fraud & other chicanery.

quebec's AMF quavers that the valeant situation is "worrying."

which allegations are worrying, asked BNN? 

"Both sides of the equation are worrying," wobbled l'autorité des marchés financiers du québec this morning.

according to BNN, the AMF said it is "watching, very seriously, the evolution of the situation ... our goal is to make sure there was no negligence regarding our regulation."

to readers who might wonder what quebec has got to do with the price of chicken, Valeant's legal head office is based in Laval's pharmaceutical park. Laval is a sprawling suburb immediately north of montreal. The quebec government has long enticed multinational pharmas to settle in this & other quebec parks, with reduced or zero tax breaks, subsidied human resources training & other lures.

laval's same pharma park was once the home of IAF Biochem, an equally legendary shooting star stock market favourite that plunged to its doom a few years back. Biochem traded heavily in the US. After someone was shot on its head office driveway in laval, it would emerge that the company was a bit of a favourite money laundering instrument for US mobsters.

to Eder - i believe ackman's pershing square bought an additional 2 million shares yesterday. Myself it's tempting but i'm a lucky biscuit. I might entertain a tempting thought in my poor silly crumpet brain, but i have ironbound fingers with lives & minds of their own. They will not, will not, will not, will not enter or swipe any kneejerk averaging-down order. They are my firewall.


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## sags

Great insight Humble...........


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## HaroldCrump

humble_pie said:


> HC alas your bloomberg link keeps returning a server error message, but the BNN links works in my browser.


I bitly'd it again - *try this*.
If it doesn't work, then it could be the embedded video is crashing for you.
I am using IE 11.0 - may be try Firefox, if you have.
I find Firefox to be the most reliable browser and IE to be the absolute worst.


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## Butters

Valeant Pharmaceuticals To Hold Investor Conference Call On October 26, 2015
10/22/2015

LAVAL, Quebec, Oct. 22, 2015 /PRNewswire/ -- Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) today announced that it will host a conference call and a live webcast along with a slide presentation on Monday, October 26, 2015 at 8:00 a.m. ET (5:00 a.m. PT). The purpose of the call will be to lay out the facts including allegations made against our company regarding our relationship with Philidor and R&O, our accounting practices, and channel stuffing that contain numerous errors, unsupported speculation and incorrect interpretations of facts and circumstances to the detriment of the shareholders of the Company.


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## humble_pie

in this case one must, of course, await what they say next monday. But in the meantime, tentatively, i'm inclined to think This too shall pass.

i don't mean that VRX share price could be expected to soar back up to previous highs. but, assuming the company survives, a position can gradually be rebuilt with option selling.

imho the key to valeant's future is what i've said before. The company has a future in the middle east, basing out of the balkans. That recent buy of egyptian pharmaceutical Amoun for nearly $1 billion was strategic.

by the flukiest of flukes i haven't lost a penny in valeant, i've at least doubled. I began buying when it was the old mississauga-based biovail, then trading around $12-15 CAD. I bought more at higher prices as time passed, but even as low as $90 CAD the share price has more than doubled from my cost.


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## Butters

humble, since you're a shareholder can you help me understand why there are like 5-10 different lawyers all trying to jump in on this and say that valeant has broke SEC disclosure laws...

will you be forwarding any of your information to one of the lawyers in hopes of getting a few dollar per share back


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## Butters

http://www.bnn.ca/Video/player.aspx?vid=733570

Jason Donville came onto BNN saying that if some guy in his basement can destroy a company like valaent, we are leaving our whole economy open to be destroyed


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## james4beach

The guy in his basement is not causing this damage. This is not how stocks fall. Here's what happened, the way I see it. I have significant experience short selling.

VRX has been flying high for a very long time. It had a technical uptrend that was out-of-this-world, which is why many (including myself) joined the bandwagon. It's healthy to normally have some doubts on a stock. VRX though was just going straight up, the market was not thinking about the doubts.

Every stock has doubts and bearish cases for it, or should anyway. What simply happened here is that one guy _eventually_ brought up a doubt or a bearish case. Since VRX was so high-flying, and had so many momentum riders, as soon as the doubt hit, *it was incredibly sensitive* to the resulting doubt.

If it wasn't this guy, it would have been another factor that sparked the doubt.

Nothing too strange about this process, and I don't blame the guy for it, nor the others bringing up negatives. There should be negative opinions on stocks. The problem with VRX is that all the momentum riding traders were ready to dump it on the first sign of any kind of trouble. They saw the trouble, so they dumped -- which is rational.

This general idea is also why I'm quite worried about the S&P 500. It's gone up in such a spectacularly crazy way, that it's very sensitive to a negative psychology shift. Because many holding the S&P 500 know that at the first sign of trouble, they must dump it. This is the natural consequence of any security that rises too much, too regularly, for too long.


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## favelle75

james4beach said:


> The guy in his basement is not causing this damage. This is not how stocks fall. Here's what happened, the way I see it. I have significant experience short selling.
> 
> VRX has been flying high for a very long time. It had a technical uptrend that was out-of-this-world, which is why many (including myself) joined the bandwagon. It's healthy to normally have some doubts on a stock. VRX though was just going straight up, the market was not thinking about the doubts.
> 
> Every stock has doubts and bearish cases for it, or should anyway. What simply happened here is that one guy _eventually_ brought up a doubt or a bearish case. Since VRX was so high-flying, and had so many momentum riders, as soon as the doubt hit, *it was incredibly sensitive* to the resulting doubt.
> 
> If it wasn't this guy, it would have been another factor that sparked the doubt.
> 
> Nothing too strange about this process, and I don't blame the guy for it, nor the others bringing up negatives. There should be negative opinions on stocks. The problem with VRX is that all the momentum riding traders were ready to dump it on the first sign of any kind of trouble. They saw the trouble, so they dumped -- which is rational.
> 
> This general idea is also why I'm quite worried about the S&P 500. It's gone up in such a spectacularly crazy way, that it's very sensitive to a negative psychology shift. Because many holding the S&P 500 know that at the first sign of trouble, they must dump it. This is the natural consequence of any security that rises too much, too regularly, for too long.



The biggest issue for me is, this isn't some independent research firm doing this for the good of the industry or investors....this firm ALSO happened to be a massive short seller. Pretty shady.


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## sags

Here is an interesting article from Bronte Capital. 

http://brontecapital.blogspot.ca/2015/10/some-comments-on-valeant-conference-call.html

This could go well beyond false sales, increased drug prices, relationships to pharmacies..........to include insurance fraud and criminal charges.

It is a criminal offense to waive or pay the "co-pay" for prescriptions for any US government health plan.

There are an awful of allegations, and I doubt a conference call is going to satisfy all the questions satisfactorily.

Governments are investigating, insurance companies and investors are filing lawsuits.

This is going to go on for awhile.


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## humble_pie

sags my reaction to the above post is to wonder whether you have aligned yourself prematurely with the anti-valeant camp?

did you happen to read the bronte capital report? all of it? me i thought that it reads like amateur notes by a befuddled personnage who is attempting but failing to impersonate an investigator.

some of the language appears to be extreme. Words like "criminal" & "perjury" are frequently attached to valeant's specialty pharmaceutical operation. However we read that every single major US pharmaceutical firm, without exception, also has networks of "specialty pharmacies" connected to it, which in turn market large inventories of its drugs & work to increase patient knowledge.

so far, what i've seen of the andrew-left-bronte attacks on valeant looks mickey mouse. I find myself wondering, instead, whether traditional Big Pharma has got maverick upstart Valeant in its crosshairs for daring to trespass on turf that Big Pharma considers to be its own, such as future offshore markets in the middle east.

in this scenario, Big Pharma would have scoured for shadowy characters to carry the flag of attack. So far, i'm unimpressed by the gang of shadows. Andrew-left-bronte & Co speak, write, look & act like the Keystone Kops of short-selling hedgefundland.

another variation of this meme would have Big Pharma looking to punt increased US investigation into pharmaceutical pricing away from itself & onto marginal producers such as valeant.

i'm more concerned by politicians who may have lined up with Big Pharma in a campaign to discredit or possibly even destroy maverick Valeant, in order to take the heat off Big Pharma for price gouging. I'm assuming it was the politicians who caused the attorneys general of new york state & massachusetts to launch investigations.


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## sags

You are right Humble.........while it looks very suspicious to me, I shouldn't prejudge the situation.

Monday's conference call will be interesting and somebody's reputation is going to suffer, Valeant or the whistleblowers.


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## humble_pie

^^

to be realistic, if there's any merit to my dumb crumb views that this is a Big Pharma price rigging story while valeant is only an early scapegoat, then nothing will be resolved by tomorrow's conference call. Only the first salvos will have been fired by 2 sides in the initial battle.

a long & fierce war lies ahead, though.

moral of the story? live like 1980 (he says he runs every day, he's going to live to 100), don't get sick, stay off prescription meds as much as possible. Not only are their prices rising dramatically but reports say their side effects are getting worse. I've heard of people who are taking prescriptions to manage distressing side effects caused by their other prescriptions ...


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## humble_pie

a small california compounding pharmaceutical firm says it will produce a generic version of Turing's controversial $750-per-pill Daraprim medication for $1 per capsule.

Turing is the company that recently drew heavy media attention & public outrage for price gouging when it bought Daraprim & increased the cost per pill overnight from $13.50 to $750.

the rival generic compound, containing the same active incredients pyrimethamine & leucoverin as Daraprim, will sell for $99 per 100-capsule bottle, says Mark Baum, CEO of Imprimis Pharmaceutical in san diego.

Baum says that Imprimis intends to manufacture other generic compounded versions of brand-name medications whose prices have recently been increased severalfold when older pharma products were bought by opportunistic companies such as Turing & Valeant.

http://www.cbc.ca/news/health/daraprim-imprimis-turing-drug-price-1.3285365

all of Big Pharma is implicated here, as compounding pharmacists can produce just about any medication, on an artisanal scale. Imprimis is the first compounder i've heard of that has ventured into mass production.


EDIT: i might be wrong here, in the penultimate sentence. I'm not sure if compounding pharmacists are allowed to prepare, for sale, identical medications to those that are still under patent. I imagine Islenska would know, if he might happen to pass by.


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## HaroldCrump

*Here is a far more reasonable and logical bear case for Valeant*.

Compared to this analyst, Andrew Left looked like a cowboy.
Analyst is a forensic accountant from Veritas Investment.


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## sags

My observation is that the US media is much more aggressive in reporting on this story.

BNN seems content to take the word of Valeant executives and some shareholders, and spend most of their time accusing the accusers.

The Wall Street Journal published an article on Sunday raising more questions on Valeant employees working under assumed names at Philidor, among other things.

Jim Cramer tweeted the Valeant conference call didn't refute any of Andrew Left's allegations.

Bloomberg has done some investigative work and has raised questions about co-payments, re-billing and other suspect practices.

I found it surprising that after Catherine Murray at BNN had spent most of the day questioning Andrew Left's motivations and applauding the Valeant conference call, she had Kevin O'Leary on as a guest when he informed her that Valeant had paid $100 million for the right to purchase Philidor for $0 within 10 years. O'Leary said when a company pays $100 million for another company and can buy it for 0$.......they own it and control it.

That is very material to the questions being asked by Andrew Left and I would have thought Ms. Murray would have known about the relationship.

The ownership of Philidor begs other questions, such as why did Valeant pay Philidor $33 million in legacy payments and have estimated they will pay another $100 million........after they already paid for and own the company ? 

Other American fund managers have given interviews on Bloomberg and some have compared the rhetoric to being the same as happened in Enron. 

Valeant isn't going to be able to talk their way out of this. They will need to do better than appointing an ad hoc committee of shareholders to investigate themselves.

The US regulators and life insurers are all over this. There is huge money at stake..........and they will shake out the truth one way or the other.

Andrew Left may have missed the mark in his accusations of channel stuffing......but he clearly opened up the door to a lot of questions about other things.

Edit.........I should say I like all the gang at BNN, and this is not intended as a slight on any of them.

They are however television business reporters and don't have the investigative operations that Bloomberg, the WSJ and others have at their disposal.


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## james4beach

There's also the situation that the overall stock market has entered an uncertain period. Stocks have not been this weak in many years... by my own T/A measures, stocks haven't been this weak since 2009.

Overall stock market strength is important because it ties into an investor's threshold for where they give up and dump a stock with suspicion around it.


----------



## humble_pie

HaroldCrump said:


> *Here is a far more reasonable and logical bear case for Valeant*.
> 
> Compared to this analyst, Andrew Left looked like a cowboy.
> Analyst is a forensic accountant from Veritas Investment.



another great find from hCrump.

hmmmn again i'm glimpsing what might be a bit more of the underpinnings. Veritas-pritzker-democratic-party, goes the golden thread. Deeper into the labyrinth tiptoes Ariadne.

part of the story - possibly most of the story - is governments trying to keep down the spiralling costs of health care with measures such as curtailing high prices for patented medications. Measures such as forcing or persuading HMOs, hospitals & MDs to use cheaper generic medications only.

for a long time now, a means Big Pharma has used to boost sales of their more expensive brand name products has been the specialty pharmaceutical firms. Evidently these ring all or nearly all pharmaceutical manufacturers like satellites. Valeant is no exception.

valeant is a convenient brand to attack first, though, since it has been conspicuously - some would say flambuoyantly - aggressive across a number of fronts for several years now.

ps it is not nice to contemplate what might be left of andrew left when they are done ...


----------



## HaroldCrump

Ha ha...it turns out that the whole Philidor pharmacy issue was not discovered by Mr. Andrew Left at all !

It was uncovered by a New York Post investigative reporter by the name of Roddy Boyd.
About the same time, a fund manager named John Hempton of Bronte Capital, based in New York, also noticed the same.

Boyd wrote about it in "Southern Investigative Reporting Foundation" on Oct 19th.
Hempton wrote a post about it on his blog too.

It does not seem like Boyd and Hempton collaborated in any way - they reached these conclusions on their own.

So how did Andrew Left come in?

Well, he chanced upon Boyd's story, stole the idea, and make a massive public splash about it.
Now he is being credited with having unmasked Valeant as an Enron-style fraud.

*Above information from this NY Times article*.

Those interested, please read Boyd's full article linked in the above NYT story.
It is a brilliant piece of investigative reporting.
No hyperbole, no theatrics.
And notice there is not even a mention of Andrew Left and/or Citron Research.

Hempton's blog post is equally good - he posts a series of open-ended legal, accounting, and regulatory questions around Valeant.
I didn't read through all of them (most of the legal & regulatory ones are well beyond my knowledge domain), but anyone interested should take a look.


----------



## sags

The NY Time article appears to have missed one company in the chain, called Isolani.

_•Valeant has an option to buy Philidor. It can exercise that option for up to 10 years. It paid about $100 million for that option, plus another $33 million in "milestone" payments to Philidor's owners, and might have to make up to another $100 million of milestone payments. The price to exercise the option and buy Philidor is zero dollars.

•Philidor has an option to buy *Isolani*. The option has not been exercised. We don't know much else about it, at least not from Valeant.

•"Isolani holds a 10% equity stake and the right to acquire the remaining 90% of equity of R&O (not yet acquired); total transaction value of $350,000." 

Under a management services agreement (MSA) with R&O, Isolani, provides management and administrative services to R&O

– Under that contract, R&O compensates Isolani with all profits and losses realized by R&O

– Contract terminates when Isolani acquires remaining 90%
_

This is quite a mess, and if specialty pharmacies make up 40% of their business, Valeant will have a difficult time meeting debt obligations without them.

There is no way it is going to return to business as usual for Valeant. 

Governments and health insurance companies aren't going to rubber stamp invoices from Valeant, Philidor or any of their subsidiaries anymore, and may decide to take their business elsewhere.

What would the company be worth without these lucrative sales channels.

At best it looks like difficult times for a troubled company ahead. At worst it looks like a total collapse of the company.

Interesting that a lot of fund managers and analysts have held a buy or hold rating on Valeant, despite the information coming out.

It is understandable they may want to attack the messenger, since they recommended the stock and will have to face angry clients and possible legal action.

Where was the due diligence from those who recommended the stock, or did everyone follow the herd ?


----------



## humble_pie

HaroldCrump said:


> Boyd wrote about it in "Southern Investigative Reporting Foundation" on Oct 19th ...
> 
> *Above information from this NY Times article*.
> 
> Those interested, please read Boyd's full article linked in the above NYT story.
> 
> It is a brilliant piece of investigative reporting




did u think it was brilliant?

me i thought Boyd's piece reads more like an amateurish collection of notes than a polished report. Patati did not return phone calls, patata did not return phone calls, etc.

as for the NY times, that's an op-ed piece, it's meant to pique & provoke, it doesn't carry NY times editorial endorsement.

i don't know who op-ed polemicist Joe Nocera but he sure loads his story. That old, old, old, old biovail smear? that was a new jersey hedge fund taking on eugene melnyk, oh, idk, many moons ago. Long before valeant ever even heard of canada, let alone heard about a pipsqueak pharma named biovail located in some unpronounceable suburb of toronto named after a lost indian tribe ...

the only reason for nocera to bring up history so ancient appears to be an attempt to load extra smear into his story.

i've also seen critics heaping scorn on valeant because valeant bought biovail to obtain biovail's offshore bermuda head office. This they moved to luxembourg, apparently later to ireland. But lots of US companies have moved/are moving their head offices to re-nascent ireland.

in fact, one wonders if there is any large company that does *not* have partners, shells, subsidiaries, marketing arms, offshore & overseas affiliations?


----------



## sags

You are probably right Humble, and Valeant may only be the tip of the iceberg, although they may be just a really bad example of growth through acquisition.

From what I have read, Valeant has been described as a "hedge fund hotel" and I believe hedge funds own almost 40% of the outstanding shares.

As long as the hedge funds hold on, which they likely would choose to do rather than book huge losses, Valeant can ride out the storm.

But if the hedge funds capitulate........who knows where the stock price will land.

Dr. Ben Carson was asked about Valeant, and he rambled on something about liberty and smaller government, and I think something about dividing up the cost of Medicare and putting $12,000 in a health account for everyone. I am not sure where he was going with that. He didn't appear to know either.

Governor Chris Christie was asked about corporate fraud and misdeeds during the Republican debate tonight, including the 'bankers" from the recession, and he said he would have prosecuted all of them and put them in prison.

None of the other candidates seemed too eager to support Christie's position, as it involves government regulation and oversight.


----------



## HaroldCrump

sags said:


> Governor Chris Christie was asked about corporate fraud and misdeeds during the Republican debate tonight, including the 'bankers" from the recession, and he said he would have prosecuted all of them and put them in prison.


sags, this is hilarious...asking a politician whether he will prosecute fraudsters after getting elected is pointless.

Remember Obama's tough talk against the banksters, financial fraudsters, and his fake ire against the AIG & Bank of America executive bonuses?

All the finger wagging, all the flailing nostrils, all that righteous outrage...

Not even a single - not one - bankster prosecuted, or even charged, not one bonus clawed back, not one company cut down to size.
There is a Grand Canyon between the Hope & Change promised vs. delivered.

Chris Christie will not give a flying rat's behind once elected...because those are the very same people funding his campaign.


----------



## HaroldCrump

humble_pie said:


> did u think it was brilliant?
> me i thought Boyd's piece reads more like an amateurish collection of notes than a polished report. Patati did not return phone calls, patata did not return phone calls, etc.
> ...
> in fact, one wonders if there is any large company that does *not* have partners, shells, subsidiaries, marketing arms, offshore & overseas affiliations?


I thought it was a well laid out case for the Philidor related issue.
He did not go all the way back into the Valeant history ever since William the Conqueror (i.e. the Biovail days, the tax inversions, etc.) - that was only in the Nocera op-ed.
The writing style is indeed different...it seemed to me that he had deliberately taken this "collection of notes" style approach.

I have not read anything else written by Boyd - this could be his usual style, or just something he adopted for this case.
One would have to read his other works to determine whether he is amateurish or does he have real reporting abilities.

But don't you think the points being raised by these non-dramatic writers are valid?
I agree most companies these days are using inversions, shells, sub-companies, offshore affiliations, etc.
But at a certain point, the line is crossed.

Some companies tend to push the envelope further than others just in order to see what they can get away with.

Has Valeant crossed the line of what they can legally get away with?

That forensic accountant on BNN also made an excellent bear case, I thought.

If we leave Andrew Left out of this, and just look at the questions being raised, I think there is enough validity to the concerns that deserve some sort of action by the regulators.

In the end, I think it will benefit everyone, esp. if Valeant come clean through this.

Did you see my other post on the Davis Henderson thread about other M&A driven Canadian companies being systematically targeted by short sharks?
An investigation into Valeant, hopefully clearing them, will keep the sharks away from other (much smaller) Canadian companies.


----------



## Janus

I don't know how any investors on the buy side ever became comfortable with investing in a company that was so intentionally opaque about its business. When you can't understand how the company makes money and how much growth is organic vs. acquired (something the company intentionally obfuscated), with so much debt and at such a hilariously high valuation, you walk away. It's easy.

The guys at Veritas know what they're talking about, especially the bloke on BNN. He knows more about accounting than any of the sell-side shills who are essentially pandering to Valeant to make sure their investment banking divisions get more M&A/debt issuance fees from the company. Has there ever been a single Canadian-listed company that has generated more investment banking fees in such a short period?

From the WSJ http://www.wsj.com/articles/valeants-ties-to-pharmacy-scrutinized-1445817449:



> Around the Phoenix-area offices of mail-order pharmacy Philidor Rx Services LLC, employees said they often ran into a friendly colleague named Bijal Patel who tracked prescriptions. But when the employees got an email from the colleague, they say he used a different name: *Peter Parker, the alter ego of Spider-Man*.
> 
> ...
> 
> He was among a few workers at Philidor offices who went by one name in person and another in emails during the past two years, according to three former employees.Interviews with former employees, doctors who prescribe Valeant drugs and patients indicate that the ties between Valeant and Philidor are more interconnected than previously disclosed. The people gave details of how the companies worked together, with Valeant employees working directly in Philidor offices, *sometimes using fictional names*. The people said this was to conceal the ties so it didn’t appear Valeant was using the pharmacy to steer patients to the drug company’s products, which Philidor strongly denied.
> 
> ...
> 
> 
> The three former employees said several people working at Philidor have Valeant ties, with some joining Philidor full-time from Valeant, while others like Mr. Patel did work at Philidor while working for Valeant. In emails, one used the name *Jack Reacher*, the protagonist of a series of thriller novels and a Tom Cruise movie, and another went by *Brian Wilson*, the name of a member of the Beach Boys, the former employees say.


I haven't done any investigation into this. But fake names?... Nah, I'm sure it's all above-board.


----------



## humble_pie

lol janus good to hear from you ... but i guess we can rule out that you didn't move from hong kong to toronto to go to work for james donville ? .:biggrin:


----------



## humble_pie

^^


IIRC the bloke on BNN expressed an inappropriate kind of shock, near the end, when he sneered that valeant had moved its head office from bermuda to luxembourg to (he said) ireland.

presently VRX HQ is situated in laval's big, well established pharmaceutical park. For decades the gummint of quebec has offered big incentives to pharmaceutical firms to locate in the province. Similar incentives are offered to plastics composites, btw (may we please not have any jokes about bombardier.) I'm sure every gummint offers similar incentives, in order to attract new industry & particularly highly engineered industry.

i'm left wondering what's illegal about moving a HO to a jurisdiction that offers big financial breaks? isn't that what every large company does, or wants to do?

a principal reason why valeant of california merged with tiny biovail of mississauga was to acquire biovail's HO in bermuda. At the time, the US of A was passing new legislation that would make it difficult or impossible for US firms to move their HOs overseas. Valeant snapped up biovail in the nick of time.

turning now to the use of fake names in marketing, this has been going on in marketing operations since the beginning of time. Who hasn't received junk mail solicitations from insurers, car insurance companies, credit card companies, including letters signed by fake names, usually entitling themselves as managers or even vice presidents ... & these insurance & credit card companies are owned by a presumably dignified big 5 canadian chartered bank ?


----------



## Janus

humble_pie said:


> lol janus good to hear from you ... but i guess we can rule out that you didn't move from hong kong to toronto to go to work for james donville ? .:biggrin:


Haha. After seeing him attack that poor reporter on BNN (JD: "Do you even know what Valeant's ROE is?" Reporter: "No, what is it?" JD: "No, I'm asking you. What's Valeant's ROE. I doubt anybody in the room other than me knows. It's 45%!") I'm glad I do not work for the guy. He was so visibly flustered during that interview, it was hard to watch. And 45% ROE? The company makes a return on invested capital of 7%, and just ratchets it up with debt. And they make losses in most years according to GAAP, not the baloney adjusted numbers they use. Not exactly a stellar business.

Absolutely, apple and google already do this ireland-lux-bahamas structure. His point wasn't that it's illegal, but rather that the US is clamping down on this (mainly due to Apple) and as a result their tax rate will increase slightly. It was a bit too much detail for the BNN spot, but hey, he's a master accountant and taxes are their thing. :biggrin:



humble_pie said:


> turning now to the use of fake names in marketing, this has been going on in marketing operations since the beginning of time. Who hasn't received junk mail solicitations from insurers, car insurance companies, credit card companies, including letters signed by fake names, usually entitling themselves as managers or even vice presidents ... & these insurance & credit card companies are owned by a presumably dignified big 5 canadian chartered bank ?


I don't know, at Valeant this is dealing with *internal *parties. I find it really hard to explain. I don't claim to know a damn thing about this company but my god does this ever look fishy.


----------



## james4beach

Janus said:


> The company makes a return on invested capital of 7%, and just ratchets it up with debt. And they make losses in most years according to GAAP, not the baloney adjusted numbers they use. Not exactly a stellar business.


Amazon doesn't make _any profit_ at all, yet with their negative earnings, the stock price has steadily increased at +31% a year 

I'm just trying to be difficult. Seriously though, if you can explain AMZN, you should do a PhD thesis on the topic.


----------



## humble_pie

this is haroldCrump's post on a possible short storm on canadian stocks coming from US hedge funds.

it's from the davis & henderson thread but certainly involves valeant. I'm wondering if perhaps this post should have its own thread? entitled something like Are canadian stocks at increased risk from US shortsellers these days?




HaroldCrump said:


> BNN just posted the following picture.
> 
> These Canadian companies have "growth by acquisition" as their core strategy.
> 
> It seems Wall St. & Bay St. are abuzz with rumors that short sharks are circling most/all of these companies.
> 
> According to what Amber is saying, shareholders of these companies should watch out for shark attacks.
> .


----------



## Janus

james4beach said:


> Amazon doesn't make _any profit_ at all, yet with their negative earnings, the stock price has steadily increased at +31% a year
> 
> I'm just trying to be difficult. Seriously though, if you can explain AMZN, you should do a PhD thesis on the topic.


I'll take a stab...

Amazon is literally destroying other businesses and reducing their profitability into the negative. Businesses I look at all over the world are making less profit because amazon comes in and cuts costs, drives people out of business, and takes everything for itself. It's incredible. The reason Amazon is allowed to do this is because they are killing their competition (look at Walmart), and one day they will be able to raise prices. They're unstoppable and it's working, and so the equity/debt markets are willing to fund that. They're owning the distribution of.... almost everything, including distribution of tiny industrial products like springs and nuts and bolts to machine shops in Asia. Amazon is a rare beast. 

Valeant just grows by acquiring and jacking up prices, both of which seem to be hitting a wall with a low share price and US government scrutiny on price increases. Their losses do matter, I'd argue. In any case, we'll find out in the next 6-12 months.

Don't get me wrong, Amazon is like a business unicorn and I don't entirely get it. But Valeant isn't in the same camp.


----------



## Janus

humble_pie said:


> this is haroldCrump's post on a possible short storm on canadian stocks coming from US hedge funds.
> 
> it's from the davis & henderson thread but certainly involves valeant. I'm wondering if perhaps this post should have its own thread? entitled something like Are canadian stocks at increased risk from US shortsellers these days?


I'm reminded of Donville again, saying short sellers are evil (and that he could drop RBC stock in one day with a report - steady on there Jason...). no, we need these people in a system to keep us honest and do the digging. How would Nortel/Enron/Worldcom/etc. come to light without people having a profit motive to dig deeper?

Predatory or not, there are indeed a ton of companies whose entire business model is predicated on cheap debt. If the market starts to dislike that for legit reasons, then so be it. I don't know much about those companies on the list, BTW.

I'd have a problem with short sellers making up lies to hit a stock, don't get me wrong. But legit sellers and short sellers help make an honest market.


----------



## humble_pie

Janus said:


> Valeant just grows by acquiring and jacking up prices, both of which seem to be hitting a wall with a low share price and US government scrutiny on price increases. Their losses do matter, I'd argue. In any case, we'll find out in the next 6-12 months.



i keep hinting but of course nobody would bother with the prattling of a dumb crumb from way down at the bottom of the scullery.

janus take a look at valeant locations all over the balkans. Their managers over there are ex smith kline & beecham, ie old british hands at pharmaceutical marketing in the east mediterranean/black sea region. Valeant wants to sell product in the middle east, it just spent nearly $1 billion to buy egyptian pharma Ayoun, to establish its formal toehold in the region.

it's part of the far-flung Silk Road story that i keep working on.


----------



## Janus

Interesting. Looks like a party further down the value chain doesn't like the smell of Philidor. 

http://www.bloomberg.com/news/artic...hilidor-valeant-partner-pharmacy-from-network

CVS Health Corp. said it would remove Philidor RX Services, the mail-order pharmacy that’s a partner of drugmaker Valeant Pharmaceuticals International Inc., from its network of pharmacies after an audit of its practices.
"CVS/caremark maintains a broad national network of 68,000 pharmacies. In accordance with CVS/caremark’s standard auditing protocols, over the last several weeks we have been monitoring and reviewing the results of recent audits of Philidor’s practices. Based on the findings from those activities, we have terminated Philidor for noncompliance with the terms of its provider agreement," CVS said in an e-mailed statement.

Sorry if I'm getting carried away with this stuff. I have no economic interest in this. But I've never seen a big case of this up close, I was too young during Nortel. Even if it's somehow all above board it's truly fascinating.


----------



## godblsmnymkr

http://www.theglobeandmail.com/repo...ilidor-adds-to-valeants-woes/article27030751/

ruh roh


----------



## AltaRed

Janus said:


> But I've never seen a big case of this up close, I was too young during Nortel. Even if it's somehow all above board it's truly fascinating.


Similar here, except in my case, i was too busy rather than too young to follow the specifics of Nortel. But I did follow the Enron story given my career in O&G


----------



## humble_pie

*how some of it works, in 50 shades of grey*

.
a few days ago i read how patients would buy the first of several physician-signed refillable prescriptions from a valeant specialty pharma like philidor or R&O pharmacy.

then representatives "from" the specialty would contact the patient & offer to fill the remaining refills in the prescription by paying the co-pay amount.

this would make the cost for the patient more or less the same as if he'd gone to his corner drugstore & purchased the generic compound. Except that he'd be getting the valeant brand product. Mailed to his home address.

i'm blind-guessing here but i'd imagine that the parties working the above marketing scheme were the same guys using the phony names.

conflicted areas appear to be "when" these sales would be booked. Also "when" these sales would be recorded in the specialty pharma's books, thus making their way to valeant's books. Also, when the insurers would be billed for drugs that had not yet been delivered to the patient. And finally, when the insurers would actually pay.

in this article, the globe's nicholas van praet has done a fine job of reporting how Russell Reitz, a camarillo california pharmacist who owns R&O, got cold feet over this practice & cancelled the pending sale of his company to a shell company essentially owned by valeant:

http://www.theglobeandmail.com/repo...uge-consequences-for-valeant/article27009664/


----------



## james4beach

Down 13% after hours on US exchange

That's really gonna hurt my 3 shares, I'm already down 48%


----------



## cn_habs

Citron's actually right as Bloomberg has actual proof that Philidor has been boosting Valeant's sales: http://www.bloomberg.com/news/artic...o-modify-prescriptions-to-boost-valeant-sales


----------



## humble_pie

cn_habs said:


> Citron's actually right as Bloomberg has actual proof that Philidor has been boosting Valeant's sales: http://www.bloomberg.com/news/artic...o-modify-prescriptions-to-boost-valeant-sales



so sorry, i don't see how this makes citron "right" or how this constitutes "actual proof."

what's being reported here is not proof, it's hearsay. It's reportage that one or more unnamed employees or ex-employees, who are too fearful to give their names, are anonymously reported as saying prescription Dispense as indicated codes were altered.

afaik anonymous hearsay is not evidence that will stand up in court.

somebodies - it's more than one somebody, says my hunch - some bodies some where really, really, really have it in for valeant. Scripting anonymii to go blab to reporters is shabby.

Q: who are the bodies? who is yanking the strings of the shabby mercenary puppets we've seen so far?


----------



## HaroldCrump

james4beach said:


> Down 13% after hours on US exchange
> That's really gonna hurt my 3 shares, I'm already down 48%


That's because CVS - the largest US pharmacy - made the decision to stop sourcing all product from Philidor.

As Kevin O'Leary said on BNN a week ago - "when in doubt, sell first, ask questions later".


----------



## sags

The way it is going Valeant could be a candidate for a future American Greed episode.


----------



## cn_habs

humble_pie said:


> so sorry, i don't see how this makes citron "right" or how this constitutes "actual proof."
> 
> what's being reported here is not proof, it's hearsay. It's reportage that one or more unnamed employees or ex-employees, who are too fearful to give their names, are anonymously reported as saying prescription Dispense as indicated codes were altered.
> 
> afaik anonymous hearsay is not evidence that will stand up in court.
> 
> somebodies - it's more than one somebody, says my hunch - some bodies some where really, really, really have it in for valeant. Scripting anonymii to go blab to reporters is shabby.
> 
> Q: who are the bodies? who is yanking the strings of the shabby mercenary puppets we've seen so far?


Did you read the whole article? Ctrl F for multiple "document obtained by Bloomberg" references.

VRX's reported EPS and rev are clearly inflated so I guess the TSX will take a hit in the near future.


----------



## godblsmnymkr

at the time the Citron guy was getting interviewed on BNN i thought it was pretty funny the way the female anchors were grilling him about his past to discredit him. paid shills.
just went to bnn now. not one article on Valeant. this should be the biggest story of the year but its nowhere to be seen.


----------



## Flash

Dropping significantly in the after markets in the US, does this practically translates to a sharp drop on the TSX tomorrow morning equivalent?


----------



## sags

The top 3 US healthcare groups announced they are dropping Valeant as a supplier and Blue Cross are others are considering doing the same.

Valeant has to get out in front of this now. They can't wait around for an ad hoc committee report. They know what was going on and it is confession time.


----------



## sags

A Macleans article on why short seller reporting is important, with a reference to Jason Donville's rant on BNN.

http://www.macleans.ca/economy/business/the-valeant-saga-why-the-world-needs-short-sellers/


----------



## Janus

sags said:


> A Macleans article on why short seller reporting is important, with a reference to Jason Donville's rant on BNN.
> 
> http://www.macleans.ca/economy/business/the-valeant-saga-why-the-world-needs-short-sellers/


That's what I was saying! :biggrin:

The Bloomberg documents are the first *actually* damning evidence we've seen so far. As opposed to fishy, it's actual wrongdoing. This is not good for Valeant.


----------



## Janus

For anyone who wants to listen live to Ackman this morning on Valeant: http://livestream.com/PershingSquare/events/4464622


----------



## Butters

Janus said:


> That's what I was saying! :biggrin:
> 
> The Bloomberg documents are the first *actually* damning evidence we've seen so far. As opposed to fishy, it's actual wrongdoing. This is not good for Valeant.


So basically if the inital drug wasn't covered by insurance they would just select a different drug....

I wonder how specific this is.... I mean if agent 001 of foot cream isn't accepted but its compound is close to agent 002 which is accepted, do they just switch the labels....
or is it like an acne cream is not covered, so they just use the foot cream that is covered...


Question, I think I recall reading Philador sold more volume than what the doctor signed for, anyone else read this, or am I just making it up



At the end of the day, Valaent is still a real company, with real products... thats why the citron quotes $50... because they can't completely wipe it out....

It owns bausch and lomb


----------



## Janus

SheaButters said:


> At the end of the day, Valaent is still a real company, with real products... thats why the citron quotes $50... because they can't completely wipe it out....
> 
> It owns bausch and lomb


Yup. I'm sure there's somebody out there calculating a floor price based on the value of the companies it had bought.

But don't forget - Valeant's brilliant strategy was to buy companies, then *fire* everyone in R&D, the most crucial department of any pharma company (their euphemism is "lean R&D"). So It still owns the rights to bausch & lomb products, but the healthy organization that was working on a pipeline of future products has been whittled down to a shadow of its former self.


----------



## Butters

hahaha not to bring politics but isn't that somewhat what Stephen Harper did  guess it can't go on forever

Destroy the long form census, make it optional.... etc
I know a lot more students getting those research grants and such are a lot happier now.



Seems Valaent has ended its ties with Philador now too.... so that will cut what 7% off their top line


Ackman says VRX could reach $400 within 3 years

I'm hoping for $200 (cdn) in 2 years


----------



## HaroldCrump

SheaButters said:


> I know a lot more students getting those research grants and such are a lot happier now


What...Trudeau has not even been sworn in yet (let alone a new cabinet assigned) & already students are getting more grants...wow.
It seems Harper was personally, quite literally, sitting on all those grant applications.

Stop making such nonsensical claims...

What you perhaps meant to say is that all sorts of grant seekers are _*celebrating *_that Harper was not re-elected.
Nothing practical as yet happened.

Although...I have no doubt that all grant applications that promote the specific agenda of the Liberal party will be approved, sooner rather than later.
Now that the *science-muzzler is gone*.


----------



## humble_pie

SheaButters said:


> So basically if the inital drug wasn't covered by insurance they would just select a different drug....
> 
> I wonder how specific this is.... I mean if agent 001 of foot cream isn't accepted but its compound is close to agent 002 which is accepted, do they just switch the labels....
> or is it like an acne cream is not covered, so they just use the foot cream that is covered...
> 
> Question, I think I recall reading Philador sold more volume than what the doctor signed for, anyone else read this, or am I just making it up




you are indeed making all the above up

why don't you read the hard news? why not check the facts before posting fiction?

the valeant-philidor-fake-names marketing team didn't change medications. They didn't sell more than what the doctor signed for.

in a nutshell, they contacted patients with re-fills, offered to co-pay the difference between the valeant brand name & the generic product sold by the corner drugstore. Lots of patients said yes. Apparently, some said no.

the dodgy part is that valeant-philidor-fake-names then billed the insurance companies for all of the refills, before they were prepared or delivered to the patient.

that's dodgy for sure, but is it illegal? does jurisprudence in this area even exist yet? i don't believe so.

millions of consumers pre-pay for countless products & services, usually with a financial incentive such as the one valeant offered. We prepay for health insurance, dental insurance, home insurance, car insurance, appliance service contracts, phone services, IT services, magazine subscriptions.

other goods & services are traditionally pay-as-you-go. Physicians' re-fill prescriptions are post-dated for a reason. They should be filled on a pay-as-you-go basis. A marketing practice based on filling & billing for all the re-fills in one take is dodgy, disruptive, intolerable.

but is it fraudulent? is it illegal?


----------



## Butters

You're right, I just know some people in research that their terms are up at the end of the year, and if Harper were to be re-elected that office was shutting down 

http://www.cbc.ca/fifth/blog/federa...facilities-that-have-been-shut-down-or-had-th


to stay on point, 

The max fine SEC can charge valeant is 3 billion... (although another company was only charged 290 mil)
valeant has 7billion coming in 2016
http://www.bnn.ca/News/2015/10/30/Ackman-faults-Valeants-reaction-to-short-seller-allegations.aspx

Bill Ackman says VRX bad news will be around for 2-4 years


so it would be fair to take off 7% total for philador
and a possible 42% for charges

from a $300 stock would still trade at $161 for end of 2016
given the price of $131 you're only looking at an increase of 23% in stock... if you want to add in your own worries or future bad news you can chop some from that

2017 should be interesting though... the company will hopefully be past most of this stuff, and have cash to keep pushing, or buyback stock while its cheap
$200 in 2 years is realistic


$300 is just a number i threw out there seemed like it was trading around that price last quarter.... perhaps $220 or $250 would be more fair



ackman said $400 in 3 years which is a tiny bit optimistic, but possible




to sum it up... the company is in hot water, but it has enough cash flow to pull through... so it just needs to settle things and it should stabilize... 
no rush to buy in now, as it will take a minimum of a year for this ordeal to unfold
if you have it now, you could just wait for better days in 2-3 years
you could sell here at a low and hope to get an increase somewhere else

i'll hold on since im well below $200, and i think it will hit that within the few years








edit: to humble, why not ask, then i can just read your answer, this is a community forum anyways


----------



## cn_habs

Short seller Citron Research promises another report on Monday. 

"VRX has a better chance of going to zero than HLF ever will," tweets Citron. "Dirtier than anyone has reported."

Folks at Citron have a sense of humor at least...


----------



## godblsmnymkr

humble, if you have a position in VRX that is unfortunate. however, there has been smoke coming out of this name for awhile now and small fire has already started. most likely it will soon be a raging fire. be careful with your capital here. 

lol @ bnn again. only mention of VRX is bill ackmans case for defending the company. definitely playing soft on them. globe has more negative story.


----------



## humble_pie

godblsmnymkr said:


> humble, if you have a position in VRX that is unfortunate. however, there has been smoke coming out of this name for awhile now and small fire has already started. most likely it will soon be a raging fire. be careful with your capital here.



lol nymkr u are new here & evidently u have never bothered to read this thread. I was the first bear on valeant nearly 3 years ago, while others in this forum - whom i could name - whose names you can observe back in the thread - were either praising the company to the skies or else speculating like impulse-ridden infants.

as i've mentioned, i had glorious puts in VRX that i sold for whopping profit last week. I'd held those puts for more than a year. All my positions in controversial stocks are hedged with options. Always.

at present, i believe the case against valeant is being stoked by the usual lynch mobsters, ie the folks who may be short themselves. You know, the folks who complain that top-performing journalists are "paid shills." The folks who complain that valeant is going to be a "raging fire."


----------



## godblsmnymkr

or this is massive corporate fraud with worse to come for shareholders. 
i have my popcorn out to watch. i have no bias either way and no positon. 
http://www.bnn.ca/Video/player.aspx?vid=732841
please watch that and tell me it didnt look like the anchors werent trying to defend VRX. also no mention of VRX yesterday on front page of website while big news was breaking. 
they are biased.

btw being a bear on VRX 3 years ago was pretty terrible if you were short. when did you initiate your puts? congrats on your profits.


----------



## CPA Candidate

HaroldCrump said:


> *Here is a far more reasonable and logical bear case for Valeant*.
> 
> Compared to this analyst, Andrew Left looked like a cowboy.
> Analyst is a forensic accountant from Veritas Investment.


This was the accounting-based investment analyst group I mentioned earlier.

This highlights something that is important in investing - you have to open up the financial statements and understand the company. If you lack the knowledge or time to do so, buy and ETF or a mutual fund. Don't invest based on analyst recommendations, they lack sufficient skepticism and independence, and don't invest based on technicals. Over the long term the results in the financial statements and the performance of the stock price will be correlated - be patient.

Companies and analysts that emphasize and prefer use of non-GAAP measures (EBITDA, adjusted EBITDA, adjusted earnings, etc) when discussing results should be regarded with suspicion. More than likely they use these measures because they reflect a more rosy reality than official measures of earnings and cashflow set by governing bodies.


----------



## Janus

CPA Candidate said:


> This was the accounting-based investment analyst group I mentioned earlier.
> 
> This highlights something that is important in investing - you have to open up the financial statements and understand the company. If you lack the knowledge or time to do so, buy and ETF or a mutual fund. Don't invest based on analyst recommendations, they lack sufficient skepticism and independence, and don't invest based on technicals. Over the long term the results in the financial statements and the performance of the stock price will be correlated - be patient.
> 
> Companies and analysts that emphasize and prefer use of non-GAAP measures (EBITDA, adjusted EBITDA, adjusted earnings, etc) when discussing results should be regarded with suspicion. More than likely they use these measures because they reflect a more rosy reality than official measures of earnings and cashflow set by governing bodies.


All correct. 

@humble, I referred to certain sell-side analysts as paid shills, not journalists. 

You do realize that the only person with a Sell rating on Valeant was the only analyst whose company doesn't have an investment banking department? Do you think that's a coincidence?


----------



## sags

After the allegations appeared in Bloomberg, Valeant announced they are cancelling their arrangement with Philidor.

It is an odd situation that they are disassociating themselves from a company they own. Given the current circumstances, it appears that the strange ownership structure might have been an attempt to shield Valeant from liability. That will probably be something we hear more about in the future.

The allegations put into the public so far, range from poor or questionable business practices (lack of transparency, ownership relationship to Philidor) to possible criminal activity involving fraud on health insurance companies (using a pharmacy licence without permission, changing pharmacy codes to upscale the drug from a generic brand to a Valeant brand name drug, making co-pay payments for customers through a company financed charity)

It won't be that difficult to sort out the allegations of criminal activity. Investigators need only contact the issuing doctors and the customers to compare what was ordered and what was charged to the insurance companies.

The other allegations of sketchy business practices will be more difficult to prove if they are legal or illegal.

Bill Ackman's 4 hour conference call defending Valeant raises it's own questions. 

Why is a major shareholder holding the news conference ? What inside information would one shareholder possess that makes them an authority on the company ?

Why are Valeant executives not holding conferences and answering questions directly ? 

One could speculate they have legal advice not to make public statements that would be subject to scrutiny later.

Part of Ackman's defence of Valeant, that the fines would be immaterial to the size of the company probably won't sit well with government regulators.

It makes regulators look impotent, and promotes the missive that as long as profits from illegal activity exceed the fines, the rules aren't important.


----------



## sags

Herbalife sent out a tweet mocking Bill Ackman.

Maybe Carl Icahn will enter the fray.............and the battle will be on again.

Interesting that Canadian Business website announced the CEO of Valeant as Canadian executive of the year on October 19.


----------



## HaroldCrump

sags said:


> Maybe Carl Icahn will enter the fray.............and the battle will be on again.


Meh, Carl Icahn is trying to figure out how to help his puppy Apple launder their $208B cash hoard without paying taxes via political SuperPACs.
That, and crying in his drink over his Chesapeake shares.


----------



## Janus

HaroldCrump said:


> Meh, Carl Icahn is trying to figure out how to help his puppy Apple launder their $208B cash hoard without paying taxes via political SuperPACs.
> That, and crying in his drink over his Chesapeake shares.


Seems like everyone's nursing some wounds right now.


----------



## humble_pie

godblsmnymkr said:


> http://www.bnn.ca/Video/player.aspx?vid=732841
> please watch that and tell me it didnt look like the anchors werent trying to defend VRX. also no mention of VRX yesterday on front page of website while big news was breaking.
> they are biased.



i'd already viewed that video days ago. 

those are first-rate journalists doing an excellent job. No bias whatsoever. The situation is massively complicated & they are required to treat every important aspect of it.

Amber Kanwar herself is likely to win an award for her ongoing series of investigations of US shortsellers & hedge fund operators. Notice how she maintains objectivity at all times, going as far as to put andrew left's shenanigans at the age of 22 into perspective, that he was acting with a group of others. 

as for andrew left, as the interview wears on he works himself up into such a rage that he is reduced to a clown figure, complete with glowers, grimaces, shouts & angry interruptions.

what i hadn't noticed, before, is that he has a marked lisp. Marked difficulty pronouncing sibilants.

btw have you noticed that, elsewhere in this thread, another poster offers the work of roddy boyd, who broke the philidor news days before andrew left warbled forth in citron research? our forum member says pointblank that andrew left "stole" the philidor story from roddy boyd.


----------



## favelle75

godblsmnymkr said:


> at the time the Citron guy was getting interviewed on BNN i thought it was pretty funny the way the female anchors were grilling him about his past to discredit him. paid shills.
> just went to bnn now. not one article on Valeant. this should be the biggest story of the year but its nowhere to be seen.


Huh? There's valient links and videos all over the bnn front page. Refresh your browser maybe.


----------



## HaroldCrump

humble_pie said:


> Amber Kanwar herself is likely to win an award for her ongoing series of investigations of US shortsellers & hedge fund operators.


Not sure if I posted this one on another thread...Amber spoke to the OSC on Wed. regarding the short sharking going on.
Their response is they are "monitoring the situation".
*Here is the video*.


----------



## humble_pie

Janus said:


> @humble, I referred to certain sell-side analysts as paid shills, not journalists.
> 
> You do realize that the only person with a Sell rating on Valeant was the only analyst whose company doesn't have an investment banking department? Do you think that's a coincidence?




my goodness, not you, Janus. You i regard as a legitimate critic. .Please hang in on this story.

i was poking fun at godblsmnymkr who accused two top-performing BNN journalists of being "paid shills." 




godblsmnymkr said:


> at the time the Citron guy was getting interviewed on BNN i thought it was pretty funny the way the female anchors were grilling him about his past to discredit him. paid shills.


----------



## Janus

humble_pie said:


> my goodness, not you, Janus. You i regard as a legitimate critic. .Please hang in on this story.
> 
> i was poking fun at godblsmnymkr who accused two top-performing BNN journalists of being "paid shills."


Oh my mistake. Clearly we're throwing the word "shill" around too much!


----------



## humble_pie

sags said:


> The allegations put into the public so far, range from poor or questionable business practices (lack of transparency, ownership relationship to Philidor) to possible criminal activity involving fraud on health insurance companies (using a pharmacy licence without permission, changing pharmacy codes to upscale the drug from a generic brand to a Valeant brand name drug, making co-pay payments for customers through a company financed charity)
> 
> It won't be that difficult to sort out the allegations of criminal activity. Investigators need only contact the issuing doctors and the customers to compare what was ordered and what was charged to the insurance companies.




i'm wondering where we're getting criminal & fraud accusations, though, other than from the shorts & the hysterical lynch mobsters?

sags u are nothing if not a practical man. How many $$ do you think it would cost to investigate $69 million worth of individual retail patient prescriptions? how many millions of slips of paper, faxes, phone calls, how many hundreds of thousands of doctors, how many millions of patients' records would have to be located, exhumed, examined & verified? don't you think such an "investigation" would take until 2020 to carry out? don't you think it would be preposterous?

as i understand things, in most cases the valeant-philidor-fake-name marketing team obtained authorization from the patients to change to the brand name medication for the re-fills. That is what their marketing campaign was set up to do, contact the patients & obtain the authorization. The patient does have the right to choose, after all.

there is some slight evidence that not all patients were contacted, nor did all agree to accept the co-pay. However, finding those exceptions will cost billions. 

what seems far dodgier to me is billing the insurers for the re-fills, which had not yet even been prepared. OK, they were purchased pursuant to a marketing offer, so in a certain sense they can be regarded as an ensemble. OK there is probably no jurisprudence in this area. But valeant does appear to have been far too opportunistic in its marketing strategies. 

still, the words "crime" & "fraud" are in an entirely different category. This morning Jim Cramer said he's taking the word "fraud" off the table when he's talking about valeant.


----------



## humble_pie

HaroldCrump said:


> Not sure if I posted this one on another thread...Amber spoke to the OSC on Wed. regarding the short sharking going on.
> Their response is they are "monitoring the situation".
> *Here is the video*.



wonderful find.

amber has my nomination for best TV reportage of the year. She's so totally on top of the situation. Clearly she knows she's been breaking a major story & clearly she's in love with her task.

it doesn't hurt that she's more drop-dead beautiful than a movie star, either.


----------



## AltaRed

Ditto to Amber !!!!


----------



## HaroldCrump

humble_pie said:


> amber has my nomination for best TV reportage of the year. She's so totally on top of the situation. Clearly she knows she's been breaking a major story & clearly she's in love with her task


+ 1



> it doesn't hurt that she's more drop-dead beautiful than a movie star, either.


+ 1,000% :biggrin:


----------



## godblsmnymkr

favelle75 said:


> Huh? There's valient links and videos all over the bnn front page. Refresh your browser maybe.


in my original post it said *yesterday* there was nothing about valeant on the front page while a huge story was breaking, and there was nothing. i'm not talking about today. re-read.
globe had it on their front page.


----------



## godblsmnymkr

humble_pie said:


> i'd already viewed that video days ago.
> 
> those are first-rate journalists doing an excellent job. No bias whatsoever. The situation is massively complicated & they are required to treat every important aspect of it.
> 
> Amber Kanwar herself is likely to win an award for her ongoing series of investigations of US shortsellers & hedge fund operators. Notice how she maintains objectivity at all times, going as far as to put andrew left's shenanigans at the age of 22 into perspective, that he was acting with a group of others.
> 
> as for andrew left, as the interview wears on he works himself up into such a rage that he is reduced to a clown figure, complete with glowers, grimaces, shouts & angry interruptions.
> 
> what i hadn't noticed, before, is that he has a marked lisp. Marked difficulty pronouncing sibilants.
> 
> btw have you noticed that, elsewhere in this thread, another poster offers the work of roddy boyd, who broke the philidor news days before andrew left warbled forth in citron research? our forum member says pointblank that andrew left "stole" the philidor story from roddy boyd.


bro, you're letting your weird crush get in the way of your perception. i really dont care if left "stole" the story or not (and nowhere did he claim the he was breaking the story. he published a report to short the stock and make $.) so him stealing the story isnt even worth bringing up. 
fact is BNN looks biased towards their perception on VRX for whatever reason. the anchors are clearly grilling Left and bringing up matters that have no bearing on the valeant story to distract from the whole point of his report. a ton more new damning information has come out about VRX and odds are there is going to be a lot more. the biggest public proponent of the company came out today with a hours long conference call and the stock still finished on dead lows. shows you what the market thought of his opinion.

also this is pretty interesting 
http://www.bnn.ca/Video/player.aspx?vid=736981

here she is saying there is no white paper for the reason the stock is down but conveniently does not bring this up http://business.financialpost.com/i...ble-in-canadian-consumer-stocks-credit-suisse. so yes there might not be a white paper but there is an article out talking about credit suisse thinking the valeant type huge growth fueled by acquisitions business model is a bubble. i held ATD and MRU but the valuations got ridiculous and i got out recently.


----------



## godblsmnymkr

http://forumserver.twoplustwo.com/showpost.php?p=48527235&postcount=4186

read this post and link from another trading forum I'm on. i will quote here from the post. 

*"The latest WSJ article really is a stunner. Jonathan Rockoff (the journalist) has one of those wonderful definitive documents: he claims to have a Philidor training manual. I have not seen this manual and cannot judge first-hand what it contains. However - the evidence provided by the WSJ - and on the say-so of the WSJ - would be very useful in determining whether there was systematic fraud at Philidor.

If this manual tells staff how to deceive insurance companies then its a slam-dunk for systematic fraud.

Moreover this is all done across state lines using mail and wires. That would be a text book wire and mail fraud against a financial institution the penalty for which is up to $1 million per instance with no limit to the number of instances." *

from bronte capital link 
*At the peak the debt market is factoring in a default probability for Valeant of almost 50 percent in the next five years (link). They are I think underestimating the problems. Obviously the equity market has a very different idea.* http://davidstockmanscontracorner.com/valeants-morning-after-default-risk-soars-next-tyco-at-hand/


----------



## HaroldCrump

godblsmnymkr said:


> fact is BNN looks biased towards their perception on BNN for whatever reason


Not at all...it is the duty of every anchor or journalist to ask tough questions to someone making such claims - whether it is a long or short thesis claim.
After all, they are giving this guy air time and a guaranteed audience (BNN has huge following - it's the only financial news channel in Canada).
They owe it to their viewers to ask tough questions.



> the anchors are clearly grilling Left and bringing up matters that have no bearing on the valeant story to distract from the whole point of his report


Even if we leave aside the questions about Left's firing from his first job & the "disagreement" with the dry cleaner in Florida, the questions about his personal trading positions is a valid one.
All guests should be disclosing their trading positions (long/short, fund or personal, etc.).
In fact, I am sure under any different circumstances, BNN would not have aired the interview if guest refuses to disclose his position.



> the biggest public proponent of the company came out today with a hours long conference call and the stock still finished on dead lows


Yeah, about that....I think there is grounds for an SEC investigation here.
What the heck is going on with these large hedge funds like Ackman & Icahn speaking on behalf of management?

Tim Cook writing personal love notes to Icahn on how Apple would like to launder their billions tax-free...and now Ackman speaking on behalf of management...

Question needs to be asked....what does Ackman know that the public does not.
Has he had separate conversations with management that have not been disclosed to the public?
What have members of management said to Ackman that they haven't told the market?


----------



## sags

Do laws against slander and liable not apply to short sellers ?

Is the premise that fraudulent short seller reports could devastate a company, based on an absence of existing criminal or civil remedy ?

Andrew Left has promised another report on Monday.

Is he going to strengthen the validity of his first report............or further tempt fate ?


----------



## jollybear

VRX.TO closed at $122.04 on Friday, down 17.67%.......who knows where this stock ends up closing on Monday. Guess it will largely depend on the validity of Citron`s upcoming report. Thoughts????


----------



## doctrine

doctrine said:


> I've never owned nor recommended a non-dividend paying healthcare stock..probably was more vocal about VRX in real life. My portfolio lagged for the first 7-8 months of the year for lack of health care, but all of a sudden is looking a lot better  All of those big funds (hedge too) are suffering now on what I think is mostly speculation and momentum gone bad. In the long run, valuation, earnings and dividends pay off. None of which VRX had, or many others in the sector, in my opinion.


I have heard a lot of the hedge funds that were the source of Valeant's high stock P/E, have been burned - and they want to recover their losses. Many are now aggressively shorting the stock. I still am not involved, nor do I think anyone else should own this directly - bad enough that it's in the index. Maybe all of the bad news is in, maybe not, but I suspect that if you truly believe in the story there will be plenty of time to get in. VRX is down 65% from the high which is close to the line that stocks might not recover from, and certainly not in a short period. If the hedge funds are turning on VRX, I would think there's just not going to be any believers in the stock that would cause it to bounce back, although I guess you never know. They might have to start selling off pieces of the company to recover shareholder value as the name itself is becoming toxic.


----------



## james4beach

Some people say technical analysis is pointless, but it did offer some warning here

Classic T/A says that you should get nervous when a stock (or index) drops below its 200 day moving average. That's the red line in this chart, and it was at $260
http://stockcharts.com/h-sc/ui?s=VRX.TO&p=D&yr=1&mn=0&dy=0&id=p55277828237


----------



## cn_habs

I wonder if Andrew Left had gotten his idea from this pharmacist: http://www.latimes.com/business/la-fi-1101-valeant-pharmacy-20151101-story.html

The end is near for VRX.


----------



## GoldStone

james4beach said:


> Some people say technical analysis is pointless, but it did offer some warning here
> 
> Classic T/A says that you should get nervous when a stock (or index) drops below its 200 day moving average. That's the red line in this chart, and it was at $260
> http://stockcharts.com/h-sc/ui?s=VRX.TO&p=D&yr=1&mn=0&dy=0&id=p55277828237


A better warning was available 6 weeks ahead of 200 DMA cross.

AZ Value blogger posted this exposé on Aug 13:

*Valeant: A Detailed Look Inside a Dangerous Story Well Told*

This blog post was impossible to miss on Twitter, if you pay any attention to Valeant. It was widely circulated and discussed.


----------



## humble_pie

so far, what the VRX short sellers have is an indignant 64-year-old california pharmacist who wanted to retire & thought he'd sold his business to an out-of-state mail order pharmacy named philidor.

next thing he knew, insurance companies began raining down payments on his camarillo, ca drugstore for prescriptions he says he'd never prepared.

he refused to send the payments to philidor, so in due course - perhaps not unreasonably - philidor's owner valeant asked for $69 million dollars.

we are told that most of the prescriptions were for a toenail fungus treatment called jublia & an acne treatment called solodyn.

idk, that's an awful lot of toenail fungus cases. Payment prices for a jublia treatment range from free to $535 USD, so it's hard to determine the cost of one bottle. Still, estimating very roughly $100 per jublia or solodyn treatment, we are looking at ballpark 690,000 californians, all connected to one pharmacy, who have been sufferingt from nasty toenails or spotty pimples in recent months. 

who knew californians are in such bad shape? if nearly 3/4 of a million californians are seeking treatment for toenails & pimples from one single pharmacy in camarillo, one shudders to think what the genuine health problems afflicting the entire state must look like.

possibly it's worth remembering that valeant owns more than 100 pharmaceutical products, including both prescription & over-the-counter medications. So far, the uproar appears to involve jublia & solodyn.


----------



## sags

From what I have read, the recommended year treatment using the toe fungus drug Jublia cost $4,000 despite having a very low success rate in the low teens and only slightly better than generic drugs that are a fraction of the cost. There have been patient reports they received the whole year's supply all at one time.

Why would physicians prescribe Jublia only, when a generic is much cheaper and just as effective ?

Answers that I can think of.........

1) Doctors were unaware or ignored the cost and comparable success rates.

2) Doctors prescribed the generic drugs and their prescription codes were changed without their consent.

3) Doctors were compensated for prescribing Jublia.

None of the answers are really all that great........but two would involve criminal matters, which may be why there are two US Attorney criminal investigations underway.

Thus far Valeant has offered precious little detailed answers, and announced they will be not being doing business with Philidor in the future. 

How does a pharmacy doing hundreds of millions in business close up shop overnight ?

It looks like Valeant is hoping their "non ownership" claims of Philidor will distance themselves from liability.

Given the circumstances, that they paid Philidor $133 million and have an option to buy it at $0, the accounting is added to Valeant's balance sheets, there were inbedded Valeant employees at Philidor under false names, and Valeant was Philidor's sole customer.............a "plausible denial" defense looks rather weak.

It will be an interesting day in the Valeant saga again today.


----------



## KaeJS

humble_pie said:


> possibly it's worth remembering that valeant owns more than 100 pharmaceutical products, including both prescription & over-the-counter medications. So far, the uproar appears to involve jublia & solodyn.


This.

Personally, I was never a buyer of Valeant until last week. It was just too much of a "high climber" for me. I've been trading in and out of VRX making day trades. Also, I've been writing options on NYSE:VRX with durations of 5 market days or less.

The stock has been punished (and rightfully so). But it does make one wonder... How much more punishment can possibly be left?

Until there is factual proof of wrongdoing, this company's stock price is going to (slowly) stabilize. I would be shocked to see the stock fall too much more than this until some evidence has been found. As for the shorts - There is only about a 3.4% short interest on VRX. Given what has happened, I really don't think that is a lot.


----------



## humble_pie

sags, wondering what's illegal about 2), if the patient requested the brand medication instead of the generic? speaking as a parent, i've known side effects from at least one generic antibiotic for childrens' ear infections that the original brand name prescription did not cause. Evidently the culprit was the filler, it produced allergy-like gastro symptoms in the child while the brand antibiotic did not. The pediatrician said he had other patients & their parents who'd experienced the same.

in recent years - as the use of generic medications has spread - i've found pharmacies that could not fill an MD's script calling for a brand name medication because all they had in the house was the generic form. When patients are in a hurry - you can't wait on a child's ear infection - they accept the generic even when they don't want to.

i don't know whether regulations & practices in california give patients the right to elect a brand medication when the script calls for generic or vice versa ... but i respectfully submit that you probably do not know either, sags, so how can you call your practice (2) above illegal?

turning now to your item (3) above, this goes on in canada all the time, so probably throughout north america, although no one would use the wording you have chosen, which makes the exchange sound like a bribe.

pharmaceutical companies trialing new drugs pay doctors to carry out final stage trials on live patients. There is work involved, the physicians have to track & accurately report the patients' statistics. No one would expect a busy MD's office to do this work for free, so physicians are compensated for this work. There's nothing illegal about it, although i for one would not accept a trialing drug if there were already established medications with proven records available.

but returning to valeant, so far there has been no mention whatsoever that any doctors were compensated for prescribing jublia. I don't see any criminal matter here.

as for your item (1), the efficacy or not of jublia medication is not what's mowing down valeant's share price. I don't see any criminal matter here.


----------



## humble_pie

*no new bombshell on monday after all*

.

_*"Andrew Left, who heads short-selling research firm Citron Research, on Sunday in an interview with The Wall Street Journal said investors shouldn’t 'expect anything earth-shattering' when he issues a new report on Canada’s Valeant on Monday. He said he plans to update his view of the company, including with comments about the company’s 'corporate culture.' "*_


http://www.wsj.com/articles/valeant...ning-of-bombshell-report-on-monday-1446417120


----------



## Janus

A quick note on the idea that short sellers or "bear raids" are unfairly/uncontrollably going after Canadian stocks:

Let's take a look at D&H - the stock recently fell 20% on a short seller's report. 

As investors what signal do we get from the company? *5 management insiders collectively buy more than $2 million of shares in the open market*. No delay. They step in and buy their own stock at a discount, because they know the short seller's report, in this case, is baloney.

Where is Valeant management? You'd think if Valeant were such a bargain that J. Michael Pearson would be backing up the truck, and yet he hasn't bought a single share.


----------



## HaroldCrump

Nonagenarian Charlie Munger *continues his dumping on Valeant*.
Claims he saw it coming months ago...
...perhaps Munger would like to tell us how the management in his darling company General Motors covered up the ignition switch faults for months...


----------



## humble_pie

sounds like a good point, but it could be argued that the VRX team doesn't have any $$ to spare.

did D & H lend the money to its execs to buy shares in that recent manoeuvre you're describing? i'd say that valeant has no discretionary cash whatsoever to fool around with its own shares or with any other purchase. Every sou, centime & farthing will be needed to pay the lawyers.


----------



## humble_pie

HaroldCrump said:


> Nonagenarian Charlie Munger ... continues his dumping on Valeant. Claims he saw it coming months ago



as i recall there were valeant critics all along the spectrum, ever since the biovail buyout. Now they're all crowding out of the woodwork.


----------



## Janus

HaroldCrump said:


> Nonagenarian Charlie Munger *continues his dumping on Valeant*.
> Claims he saw it coming months ago...
> ...perhaps Munger would like to tell us how the management in his darling company General Motors covered up the ignition switch faults for months...


Claims he saw it coming? He's _on record_ as having seen it coming. :biggrin:

I would imagine his response to that would be that GM's scandal was immoral and wrong, but that it's not the foundation of GM's entire business model - designing and selling cars. The concerns about Valeant are more central to how the company operates - price raises (arguably immoral) and acquisitions (unsustainable unless the capital markets are on your side). I'll admit the shady Philidor stuff may be isolated to that one channel, but still stinks to high heaven.


----------



## humble_pie

goldman downgrades VRX but at bloomberg's premarket round table on valeant this am, Alkermes CEO richard pops says he'll defend valeant by pointing to cash flow.

the business is still a going concern, pops says. Valeant sells "hundreds of products generating all kinds of cash flow" all over the world, he says.


----------



## humble_pie

Janus said:


> Claims he saw it coming? He's _on record_ as having seen it coming. :biggrin:



lots of folks are on record as having seen it coming. Me i'm on record, here in this thread, nearly 3 years ago . :biggrin: :biggrin:

the thing is, i changed my mind slightly when they bought Amoun. I thought they were finally beginning to fire legitimately on their long-planned middle east project.

if valeant survives, i hope that'll be their direction. You think they're worried, in the middle east today, about whether a pharmacist dispenses brand name or generic medication?


----------



## humble_pie

vrx stock recovers, andrew left is nowhere to be seen, while other analysts turn cautiously bullish.

valeant will take a long time to recover, says goldman.

http://www.marketwatch.com/story/va...ong-road-to-recovery-2015-11-02?siteid=yhoof2


----------



## Getafix

Seems Andrew is laughing all the way to the bank right now.


----------



## HaroldCrump

^ for sure. It calls for both QC & US SEC investigation.


----------



## sags

It looks like Humble's reluctance to jump on the Andrew Left bandwagon, was a wise decision.

His latest report was withdrawn, citing lawyer concerns when he admits he was going to publish his report with 80% proof of authenticity.

There is too much room for error at only 80% confidence in the veracity of a report.......thought his lawyer.

Was the whole financial world waiting on Andrew Left's report, because the swirling tornado seemed to unceremoniously plop after the retraction of his announcement, or is it the announcement of his retraction ?


----------



## sags

Kevin O'Leary has been giving some great interviews with Catherine Murray on the Valeant story.

He seems to have changed his tone, and his discussions are a lot more insightful and entertaining recently.

He has taken on the role of a bit of a comedian, calling Goldman Sachs "neutral" rating equivalent to glancing at the window to watch the stock price plummet by.

He had Catherine Murray laughing about that, since she used to work at Goldman Sachs...........and his reference to the Canadian dollar as a "dollarette" was funny.

His videos are posted on BNN.


----------



## godblsmnymkr

humble_pie said:


> vrx stock recovers, andrew left is nowhere to be seen, while other analysts turn cautiously bullish.
> 
> valeant will take a long time to recover, says goldman.
> 
> http://www.marketwatch.com/story/va...ong-road-to-recovery-2015-11-02?siteid=yhoof2



I wouldnt call going from 347 to 118 and then up 131 a recovery. i would call it a drop in the bucket of massive wealth destruction. 
cheeky tweet from citron on friday in the morning implying they had more dirt. 
two scenarios are possible here:
-he had what he said but valeants legal department stopped him from releasing it
- he never had anything and used the tweet to get a better price to cover his shorts. 

either way it should be entertaining to watch the story unfold going forward. this sucks for couch potator'ers owning candian index funds for the last few months.


----------



## cn_habs

godblsmnymkr said:


> I wouldnt call going from 347 to 118 and then up 131 a recovery. i would call it a drop in the buck of massive wealth destruction.
> cheeky tweet from citron on friday in the morning implying they had more dirt.
> two scenarios are possible here:
> -he had what he said but valeants legal department stopped him from releasing it
> - he never had anything and used the tweet to get a better price to cover his shorts.
> 
> either way it should be entertaining to watch the story unfold going forward. this sucks for couch potator'ers owning candian index funds for the last few months.


Nicely said.

The plot thickens: http://www.prnewswire.com/news-releases/statement-from-philidor-rx-services-300170795.html


----------



## james4beach

> if valeant survives


They're hardly 'toast' yet... this is still a $45 billion market cap company. It's the 12th largest in the TSX Composite (nearly 300 stocks)


----------



## sags

cn_habs said:


> Nicely said.
> 
> The plot thickens: http://www.prnewswire.com/news-releases/statement-from-philidor-rx-services-300170795.html


Philidor still refers to itself as a different company than Valeant, with Valeant as their "principal client".

That charade continues to play out in an integral part of the overall story. 

Can Valeant shareholders expect their $133 million back since Philidor breached the performance contract, or would the owners of Philidor just pocket the cash and walk away ?

Maybe breaking up isn't so hard to do after all.

Interesting last line in the public statement.........

_During this period, Philidor will fill, *as prescribed*, all prescriptions for the next week and may continue to dispense certain prescriptions beyond that._


----------



## humble_pie

godblsmnymkr said:


> I wouldnt call going from 347 to 118 and then up 131 a recovery. i would call it a drop in the bucket of massive wealth destruction.
> cheeky tweet from citron on friday in the morning implying they had more dirt.
> two scenarios are possible here:
> -he had what he said but valeants legal department stopped him from releasing it
> - he never had anything and used the tweet to get a better price to cover his shorts.
> 
> either way it should be entertaining to watch the story unfold going forward. this sucks for couch potator'ers owning candian index funds for the last few months.




1) remarks are written in the present tense & refer to the action of monday morning only, when VRX was recovering on the day from last friday's lows in the $93 range. Remarks do *not* mean any kind of long-term range.

2) stale news from last friday does not count. The only significant news yesterday was that andrew left, who had promised new mega-dirt on monday, was reneging & he would fail to deliver.

3) valeant's legal department did not stop andrew left from any action whatsoever, you are wrong in saying this. Left's own lawyers stopped him. Left explained very clearly to the Wall street journal how his lawyers had advised him to keep his mouth shut. There's a link to the WSJ story with the details upthread.

4) it will be interesting to see how many investment firms & pension boards will sue andrew left, once the securities investigators start to release their findings.


----------



## Janus

I'm starting to think Valeant is really screwed.

Its business model is based on cutting R&D, and instead acquiring patented drugs by buying other companies in order to grow. Pharma companies normally spend 12% of sales on R&D, Valeant spends low single digits. That's the business model.

*Simply put, it now can no longer buy other firms.*
- No company would accept Valeant stock in an acquisition now.
- They're tapped out of being able to raise more debt. They already have $30 billion of it. The company has a negative tangible book value. Good luck rolling over the debt, which even if successful, will occur at significantly higher rates.
- They have no cash sitting around to buy.

Ok, so the M&A story is done. Can't raise more money to buy things.

In the absence of M&A, R&D is the way pharma companies grow. Valeant doesn't "do" R&D, and if they do margins will collapse. 

So the growth story is done. They sell mostly branded generics. Prices for these things decline over time.

Add to this:
- impending fines from federal/state prosecutors
- loss of 7% of sales through Philidor
- reputational loss. Imagine you're a pharma rep at a valeant competitor. You walk into a doctor's office and hand the guy a newspaper article on what Valeant/Philidor were up to. Read the pharma rep forums, the valeant pharma reps are being laughed out of their clients' offices now.

The valeant growth story is done, and they have way too much debt. The debt issue is real - option markets are implying a 40%+ probability of default. I just don't see how this can recover.

And lastly, the idea that we've heard the last of the bad news - with feds, investors, insurance companies and reporters now all over this - is truly naive in my mind.


----------



## james4beach

sags said:


> Can Valeant shareholders expect their $133 million back since Philidor breached the performance contract, or would the owners of Philidor just pocket the cash and walk away ?


This alone is not a big deal (if it was the only issue). Forfeiting the $133 million just 0.3% of the company's value


----------



## godblsmnymkr

http://seekingalpha.com/article/3644836-valeant-the-next-shoe-to-drop

*

Valeant was downgraded to "B+" from "BB-" by S&P after Valeant severed ties with Philidor.

Philidor represents about 6% of Valeants revenue through January. Loss of that revenue stream would come at an inopportune time.

Valeant's $32B debt load is at 6.3x EBITDA. It could deteriorate to 6.7x EBITDA after the loss of Philidor.

If Valeant's EBITDA slides further due to a loss or its reputation with doctors or pharmacies, its debt could become untenable.

Valeant's inability to service its debt could be the next shoe to dro*p.


----------



## sags

james4beach said:


> This alone is not a big deal (if it was the only issue). Forfeiting the $133 million just 0.3% of the company's value


It's more of the moral issue of Philidor owners waltzing away with $133 million, considering the circumstances.....although there are legal ramifications as well.

If Valeant was their sole customer, why was the company worth $133 million in the first place ?

Investigators should follow the money trail from the sale to see where it actually leads.

Philidor was created in 2013, and had obtained a rating of "F" from the Better Business Bureau due to many complaints about different practices, such as calling customers and offering to send prescriptions that were never ordered and offering to sell them drugs for only the co-pay amount. Then the customers and insurance companies were billed for the full amount. Some complaints were that Philidor was basically a call in centre and didn't answer consumer complaints at all.

All the talk from the CEO of Philidor about supporting customers looks like PR claptrap, given their BBB rating of F. 

I won't be surprised to see a whole lot more coming out from investigations on Philidor.

The question if Valeant owned Philidor outright due to the "arrangement"............hasn't been fully answered yet.

The $133 million in payment is key to answering that question.

All these investigations and lawsuits are going to take years to settle. 

http://www.businessinsider.com/philidor-valeant-consumer-complaints-2015-10


----------



## humble_pie

Janus said:


> I'm starting to think Valeant is really screwed ...




janus this is great analysis. Good for you.

what i hope you'll do now is put work like this into action on the *next* valeant. Before it all happens. There are plenty candidates around. Evidently all the big pharmaceutical companies have their own specialty pharma networks. To market their brand name drugs in "special" circumstances, roll-eyes.

work like this, if you can get it into play early enough, is going to turn you into a multi-millionnaire.

it's a bit late to short valeant now, though. The company has become every angry dysfunctional person's whipping boy. It's mob lynching psychology all over again. We can see right here in this thread, there are emotional personalities who claim they have never had any interest in valeant whatsoever, neither long nor short, yet here they are *bellowing* their heads off in *bold face type*.


----------



## sags

Beyond trying to figure out Valeant's relationship to Philidor.............there is a whole lot more.

There is Phiidor's relationship to R&O Pharmacy and the issues surrounding $69 million in unpaid drug sales, which the past owner claims were sent using his pharmacy number without his permission. Who owned R&O.........Phlidor, Valeant, or Mr. Reitz ?

There is also Philidor's relationship to a pharmacy called Isolani..........which it turns out is the term for a chess strategy to "isolate the pawn" to contain damage.

In Valeant, Philidor, Isolani.............the same people keep popping up in ownership and domain name records.

This whole deal is quite complicated and looks more the handiwork of financial engineering than pharmacists delivering drugs.

http://seekingalpha.com/article/360...aud?li_source=LI&li_medium=liftigniter-widget


----------



## humble_pie

sags u such a sweetheart, why are u so obsessed with blaming in this story?

have you ever held any position in valeant? you don't think muck is everywhere? :biggrin:


----------



## sags

Absolutely right on my count Humble..........

It is the intrigue of a good mystery, possibly a crime drama..........or possibly a case of careless accusations by a short seller, that draws my interest.

Totally agree there is muck everywhere there is big money involved, but this story has been laid out in for all to see.

I do also follow some good news though.....................Clorox is a fine story.


----------



## HaroldCrump

sags said:


> It is the intrigue of a good mystery, possibly a crime drama..........


Movie is already underway...Brad Pitt as Bill Ackman, Leonardo di Caprio as Andrew Left.
Amber Kanwar starring as herself....


----------



## godblsmnymkr

humble_pie said:


> janus this is great analysis. Good for you.
> 
> what i hope you'll do now is put work like this into action on the *next* valeant. Before it all happens. There are plenty candidates around. Evidently all the big pharmaceutical companies have their own specialty pharma networks. To market their brand name drugs in "special" circumstances, roll-eyes.
> 
> work like this, if you can get it into play early enough, is going to turn you into a multi-millionnaire.
> 
> it's a bit late to short valeant now, though. The company has become every angry dysfunctional person's whipping boy. It's mob lynching psychology all over again. We can see right here in this thread, there are emotional personalities who claim they have never had any interest in valeant whatsoever, neither long nor short, yet here they are *bellowing* their heads off in *bold face type*.


*lol. i'm just weirded out by your continued support for this company which has some pretty glaring ethical shortcomings. more bold type for you *
the fact is this company has a non sustainable business model and has too much debt. on top of that its credit rating was recently cut making it harder to pay back that debt. very recently the bond market was pricing in a 43% chance of valeant defaulting. 
i dont hear a lot of facts out of you. just weird comments on your crush and opinions full of hubris.
going to not comment in this thread for awhile to see how it plays out. 
-6% today


----------



## Janus

humble_pie said:


> janus this is great analysis. Good for you.
> 
> what i hope you'll do now is put work like this into action on the *next* valeant. Before it all happens. There are plenty candidates around. Evidently all the big pharmaceutical companies have their own specialty pharma networks. To market their brand name drugs in "special" circumstances, roll-eyes.
> 
> work like this, if you can get it into play early enough, is going to turn you into a multi-millionnaire.
> 
> it's a bit late to short valeant now, though. The company has become every angry dysfunctional person's whipping boy. It's mob lynching psychology all over again. We can see right here in this thread, there are emotional personalities who claim they have never had any interest in valeant whatsoever, neither long nor short, yet here they are *bellowing* their heads off in *bold face type*.


I'm not trying to say I could have found this beforehand, or that longs were stupid for not seeing it - though I did have the good sense to avoid it categorically, based on its reputation for opacity and its debt-fueled M&A spree. 

I'm just saying that from this point on I find it hard to picture a strong recovery.


----------



## sags

HaroldCrump said:


> Movie is already underway...Brad Pitt as Bill Ackman, Leonardo di Caprio as Andrew Left.
> Amber Kanwar starring as herself....


LOL..............


----------



## humble_pie

Janus said:


> I'm just saying that from this point on I find it hard to picture a strong recovery.



you're right, no strong recovery. Company will be lucky to survive. I'm thinking they might be far enough along the Silk Road by now that it will save them, though.


----------



## humble_pie

godblsmnymkr said:


> i dont hear a lot of facts out of you. just weird comments on your crush and opinions full of hubris.




i don't have any crush or hubris, those are hysterical semantic twists coming from a self-admitted card player who says he's never held any interest whatsoever in valeant, neither long nor short.

look at the history of this thread. I set the thread up nearly 3 years ago. I've steadily warned against valeant ever since, in every single post. A hallmark of my investing approach is that it is balanced.

right now valeant appears to have been wisely counselled to say nothing until the investigators' findings finally appear. In this vacuum, predictably, the card sharks & the crazies have nothing to do except continue to scream their heads off.

also predictably, the VRX share price will continue to drop. There's nothing to stop its freefall until more of the story airs officially.

it's andrew left - looking stoned, zoned & impulse-ridden in every interview, as another respected cmffer puts it upthread - who has no facts to offer. His accusations are nothing but lurid generalities. It's another enron, says citron the puckerface. Channel-stuffing, says the lemon. Phantom pharmacies.

how, asks one journalist, are you targeting a $50 price on VRX?

i don't know, replies puckerface, who in fact stole his accusations from Southern Investigative Reporter in the first place.

the price could just as well be zero, says puckerface. If you want to know any hard facts in the matter, you will have to ask valeant, adds the lemon.

i don't have anything new to add, he tells the Wall street journal three days ago.

as for myself, i'm neutral. My own positions are hedged. I'm looking to preserve a cool, neutral, fact-based balance in this thread, as i always do. There's no reason to turn the thread into a gory ISIL beheading scene.


----------



## AltaRed

More fodder for armchair quarterbacks. http://www.canadianbusiness.com/bus...from-4-companies-over-increasing-drug-prices/


----------



## godblsmnymkr

ok ok you got me for one more post. this is such a waste of time but i cant resist.



humble_pie said:


> i don't have any crush or hubris, those are hysterical semantic twists coming from a self-admitted card player who says he's never held any interest whatsoever in valeant, neither long nor short.


judging from your use of hysterical and semantic here i'm honestly not sure if you know what those words mean. as for being "a self admitted poker player" im not sure what you are getting at here. i am proud of my poker career. i became a self made millionaire before 30 by grinding out cash games for 8 years. many hedge funds and traders consider poker THE BEST practice to prepare for a career in trading/investing. 
you keep bringing up the fact that i have no position in the stock. i dont know why this is relevant. corporate greed and fraud fascinates me as much as it enrages me. its a huge story and its possible this is next in the line of huge corporate scandals from canadian mega companies. we will see what happens. 



humble_pie said:


> look at the history of this thread. I set the thread up nearly 3 years ago. I've steadily warned against valeant ever since, in every single post. A hallmark of my investing approach is that it is balanced.


you also continuously bring this up. i snapped today and wasted my time going back through the history of this thread. your posts were barely a warning. you did not tell anyone they should sell or not buy this stock. all you posted was that you were long but suspect of the company. it is weird to me you are proud of this. for all i know you are a trapped long in this stock getting his clock cleaned (sure sounds like it.) hopefully you sold awhile ago. 




humble_pie said:


> right now valeant appears to have been wisely counselled to say nothing until the investigators' findings finally appear. In this vacuum, predictably, the card sharks & the crazies have nothing to do except continue to scream their heads off.
> 
> also predictably, the VRX share price will continue to drop. There's nothing to stop its freefall until more of the story airs officially.


again you're posting nothing of substance here. i am posting facts and articles. you are posting strange opinions. you are barely making sense at this point 



humble_pie said:


> it's andrew left - looking stoned, zoned & impulse-ridden in every interview, as another respected cmffer puts it upthread - who has no facts to offer. His accusations are nothing but lurid generalities. It's another enron, says citron the puckerface. Channel-stuffing, says the lemon. Phantom pharmacies.
> 
> i don't know, replies puckerface, who in fact stole his accusations from Southern Investigative Reporter in the first place.
> 
> the price could just as well be zero, says puckerface. If you want to know any hard facts in the matter, you will have to ask valeant, adds the lemon.
> 
> i don't have anything new to add, he tells the Wall street journal three days ago.


ok some things are clear now
1) you dislike andrew left for whatever reason
2) you argue based on opinions not facts or links to articles
3) you really like the girl from bnn and think its awesome shes going after short sellers. andrew left being right would besmirch your crushes honor. 




humble_pie said:


> as for myself, *i'm neutral*. My own positions are hedged. I'm looking to preserve a cool, neutral, fact-based balance in this thread, as i always do. There's no reason to turn the thread into a gory ISIL beheading scene.


no it is obvious you're very biased in valeants favour for whatever reason. unfortunately for you the market agrees with Left for now. i'm glad you are looking to but you are not supplying any facts and no balance.
good luck with your investing


----------



## Butters

I think everyone hates Andrew Left... how can one take away so much canadian captial...
Luckily he guessed on something... Philador turned out to be a loose end, its gone along with some minor profits.... and now all the lawyers, and such will tear some more profits

going to court over some price gouging...

end story 32B debt, less than 7B profit.... a few of their patents expire in those 4+ years, and with no new research it's kinda scary... definitely a long recovery... but they won't disappear... I think they will use their incoming cash wisely...


----------



## humble_pie

HaroldCrump said:


> Movie is already underway...Brad Pitt as Bill Ackman, Leonardo di Caprio as Andrew Left.
> Amber Kanwar starring as herself....



HC how are you seeing casting the Silk Road characters though.

this part of the script is so much more difficult. I'm thinking british actors. Some portly, some young & lean, but all ex-pats living in the balkans. Good connections to egypt.


----------



## Janus

SheaButters said:


> I think everyone hates Andrew Left... how can one take away so much canadian captial...
> Luckily he guessed on something... Philador turned out to be a loose end, its gone along with some minor profits.... and now all the lawyers, and such will tear some more profits
> 
> going to court over some price gouging...
> 
> end story 32B debt, less than 7B profit.... a few of their patents expire in those 4+ years, and with no new research it's kinda scary... definitely a long recovery... but they won't disappear... I think they will use their incoming cash wisely...


I think you're approaching this the wrong way. If he's right, then that capital didn't deserve to exist in the first place. It was peoples' imaginations running too far, people being greedy resulting in speculation. Was the value of pets.com "taken away", or did it not exist to begin with? Short sellers keep the market honest, they need to exist.



humble_pie said:


> as for myself, i'm neutral. My own positions are hedged.


I don't understand what you mean when you say this. You keep saying you're hedged. Have you been net long or net short? Why hedge to neutral instead of just not owning the stock?


----------



## sags

I don't think this article has been posted........but it is a bombshell.

http://seekingalpha.com/article/364...178fc6b53c38bbcf2b23766f0172aa1&uprof=46&dr=1

http://pdfsr.com/pdf/the-missing-piece

*If true*...........in a nutshell, it appears to document how Valeant's business plan came to be based on a template of previous fraud and corruption at another pharma company.

It alleges to show that Valeant hired the perpetrators of the other frauds to structure their own business.


----------



## fstamand

Bears are out on this one this morning :hopelessness:


----------



## Janus

fstamand said:


> Bears are out on this one this morning :hopelessness:


Yeppers.



sags said:


> I don't think this article has been posted........but it is a bombshell.
> 
> http://seekingalpha.com/article/364...178fc6b53c38bbcf2b23766f0172aa1&uprof=46&dr=1
> 
> http://pdfsr.com/pdf/the-missing-piece
> 
> *If true*...........in a nutshell, it appears to document how Valeant's business plan came to be based on a template of previous fraud and corruption at another pharma company.
> 
> It alleges to show that Valeant hired the perpetrators of the other frauds to structure their own business.


Yeah. And most importantly, where is the company on this? Valeant hasn't said anything for a while now. 

Is management coming out with anything to prove any of this is wrong?
Crucially, absolutely crucially, is management buying shares in the open market to communicate their confidence? Absolutely not.


----------



## sags

Not surprising..........with other news coming out.

The Senate announced an investigation and a large US healthcare insurer announced they had severed ties with Philidor a year ago due to billing practices. Philidor continued to try to invoice the provider with bills from other pseudo pharmacies.....which evidently are nothing more than websites that all direct to Philidor. The insurer had to send cease and desist letters to different pharmacies all connected to Philidor. 

From information contained elsewhere......the pseudo websites domain names were all registered on the same day, and appear to be solely to provide additional billing options to hide Philidor's involvement, using the pharmacy licence of the owner of the R&O pharmacy (without his knowledge or permission - he claims).

http://business.financialpost.com/i...-on-to-odd-billing-at-valeant-linked-pharmacy


----------



## godblsmnymkr

humblepie living up to his name


----------



## humble_pie

sags said:


> Not surprising.......... pseudo pharmacies



wheee! so fun!

l'Inspecteur Clouseau vit encore! never mind the fact that un clou is not a clue, it's a nail. Verily, poor valeant is lying in its nail bed of torture.

isn't life as a muckraking investigator a laff riot, sags? carry on! mention très bien! we await your further instalments!


----------



## HaroldCrump

humble_pie said:


> HC how are you seeing casting the Silk Road characters though.
> this part of the script is so much more difficult. I'm thinking british actors. Some portly, some young & lean, but all ex-pats living in the balkans. Good connections to egypt.


You mean the ex Glaxo execs.
One of them can easily be played by *Pierce Brosnan*...excellent actor to play suave, sophisticated corporate crook, ex Glaxo exec from Hong Kong.
He can do those scenes in the strip clubs of Shanghai, which the GSK execs frequented no doubt, very easily & convincingly.

Give me some real names and I'll find you actors that fit the role.

We need a cameo for the senile old phart Charlie Munger
*Bill McCutcheon* would have been perfect for the role...too bad he passed away many years ago, a real loss


----------



## sags

humble_pie said:


> wheee! so fun!
> 
> l'Inspecteur Clouseau vit encore! never mind the fact that un clou is not a clue, it's a nail. Verily, poor valeant is lying in its nail bed of torture.
> 
> isn't life as a muckraking investigator a laff riot, sags? carry on! mention très bien! we await your further instalments!


_"Oh yes, it is clear to my trained eye there is much more going on here than meets the ear"

_Inspector Clouseau


----------



## humble_pie

HaroldCrump said:


> We need a cameo for the senile old phart Charlie Munger
> *Bill McCutcheon* would have been perfect for the role...too bad he passed away many years ago, a real loss



mcCutcheon is dead already? then he'd be perfect for the part


----------



## humble_pie

Janus said:


> I don't understand what you mean when you say this. You keep saying you're hedged. Have you been net long or net short? Why hedge to neutral instead of just not owning the stock?



as mister mcGuire said to dustin hoffman's character in The Graduate,

_I want to say one word to you. 
Just one word.
Are you listening?
Options.
There's a great future in options.
Think about it._


----------



## HaroldCrump

humble_pie said:


> Some portly, some young & lean, but all ex-pats living in the balkans. Good connections to egypt.


I think ex HSBC chairman Douglas Flint is perfect for the role of portly, ex Glaxo exec.
He's perfect counterpart to the sauve crook Pierce Brosnan.
It's safe assumption Flint will never be charged to go to jail, so our movie schedule won't be affected

Here he is, leaving the courthouse last year


----------



## KaeJS

Anyone buying and holding out for the long term?

My naked puts expired in my favour on Friday. Wondering if I should start taking a long position as opposed to writing naked puts.

My thoughts are to do a buy-write. Purchase for roughly $110/share on the CAD exchange and then sell calls for $150 for April 2016....


----------



## KaeJS

humble,

I know you already have an inherent long position on the stock from years ago. I imagine you have previously written calls on your stock. If so, are you buying back those calls on the cheap or just riding the wave and seeing what happens?


----------



## humble_pie

HaroldCrump said:


> I think ex HSBC chairman Douglas Flint is perfect for the role of portly, ex Glaxo exec.
> 
> It's safe assumption Flint will never be charged to go to jail, so our movie schedule won't be affected



great! but i think we need more bollywood plus a couple of strong sub-plots with at least 2 or 3 gorgeous women in the movie

can u think of somebody to play an armed female commando? 

she doesn't use drugs herself of course but she's deployed in some mountainous border region where smuggling, aka the silk road trade, goes on ...


EDIT: angelina jolie as a senior ranking rebel commander?


----------



## humble_pie

fascinating article by Jillian Clare Kohler, associate professor of pharmacy at the U of T, who minces no words.

valeant's questionable practices are standard throughout the pharmaceutical industry & many pharmaceutical companies, not just valeant, are "bad citizens," kohler writes.

among her key concepts:

- exploitative pricing of orphan drugs & older drugs must end; 

- pharmaceutical companies should be transparent about R & D costs instead of vaguely citing "high costs" as justification for insupportably high drug prices;

- increased government regulation of the entire pharmaceutical industry is required.

http://www.theglobeandmail.com/repo...of-the-reality-of-big-pharma/article27163190/


----------



## sags

I read a review of the TPP, in which the author contends it was apparent that big pharma was lobbying hard for certain clauses to be included.

It was the author's contention that changes to intellectual property goes far beyond illegal downloading etc..........and includes expanded drug patents and an override to any legislation that could affect pharma profits.

The "changes" recommended by Dr. Kohler would probably not be possible under the TPP...........as the pharma companies could sue the government.

Eli Lilly is apparently currently suing the Canadian government for not allowing some of their drugs into Canada that don't meet Canadian standards of efficiency.

http://www.thestar.com/business/201...rma-suit-guesses-dont-make-valid-patents.html

Big business.........from banks to pharma were represented at the TPP talks. 

Who represented consumers, retired folks, and average Canadians at the table ?


----------



## humble_pie

^^

thanks sags, excellent connection


----------



## KaeJS

In for 14 Naked Put contracts @ $65 strike. November 13 Expiry. $0.55 Premium.

Obviously NYSE:VRX.


----------



## james4beach

^ KaeJS, that sounds exhilarating.


----------



## humble_pie

.
now that he's grasped the script - big pharmas are privately selling their brand name prescription medicines in order to undercut generics at HMOs, hospitals, clinics, MDs & pharmacies - bitter lemon andrew left has gone after another one.

mallinckrodt. Phhhhht MNK collapsed more than 20% yesterday.

it's astonishing how citron's grubbychic looks have taken america by storm. The lemon looks like he sleeps in his clothes. Pow, that's a 40% plunge in valeant for the shorts.

citron looks like he hasn't seen daylight in 10 years. Blech, there goes mallinckrodt.

citron's dark five o'clock shadow is sinister. Who's next?


----------



## Janus

humble_pie said:


> .
> now that he's grasped the script - big pharmas are privately selling their brand name prescription medicines in order to undercut generics at HMOs, hospitals, clinics, MDs & pharmacies - bitter lemon andrew left has gone after another one.
> 
> mallinckrodt. Phhhhht MNK collapsed more than 20% yesterday.
> 
> it's astonishing how citron's grubbychic looks have taken america by storm. The lemon looks like he sleeps in his clothes. Pow, that's a 40% plunge in valeant for the shorts.
> 
> citron looks like he hasn't seen daylight in 10 years. Blech, there goes mallinckrodt.
> 
> citron's dark five o'clock shadow is sinister. Who's next?


Say what you want about Left, it looks like the market doesn't even take Peason seriously. "Philidor's CEO has assured me there was no fraud". Oh, perfect then, we're taking them at their word. I wonder if Peter Parker told him that.

-6% for the day.


----------



## sags

Mallinckrodt acquired a company and raised the price of a 60 year old drug from $40 to $28,000 a vial ?

I have to wonder why insurance companies would have been paying those costs without a whimper. No wonder the US health system is so expensive.

It is surprising how it took rumpled Andrew Left to ferret out all this information, but then again.............as previously posted maybe the information was already there but nobody was paying attention.

The financial architect of the Philidor model is now teaching business practices at his alma mater, after being involved in several similar schemes..........yikes.

_Kornwasser also became an adjunct professor at Yeshiva, where he teaches a course entitled "Managing a Growing Business."_

http://finance.yahoo.com/news/former-valeant-top-executive-mum-195239519.html#


----------



## HaroldCrump

sags said:


> I have to wonder why insurance companies would have been paying those costs without a whimper


It's simple, sags - _because they don't pay for it_.
The cost is easily passed on...to the employers that provide health insurance plans to their employees.
What do the employers do in turn?
Yup, you guessed it...they offshore the jobs to China, India, etc.
And, if that's not enough, they move the corporate operations to Ireland, Bermuda, Liechtenstein etc.

A health plan is the single largest cost for most small to mid-size companies in the US (keep in mind that a mid size US company is equivalent to a large cap corporate giant in Canadian terms).
It is an even bigger line item than retirement plans (401Ks) for many companies.


----------



## sags

I have to update the price..........it must have gone up in the last few minutes. This article quotes it at $35,000 a vial now and some insurers refuse to pay except for infant seizures.

http://www.ocregister.com/articles/drug-691329-mallinckrodt-acthar.html

This is as blatant as examples of price gouging the vulnerable get.

I looked up "price gouging" to see if it is illegal or simply immoral, and it looks like some US States have criminal laws against it.

But companies probably take the same attitude as Jamie Dimon did with Elizabeth Warren over banking irregularities, when he said "if it is illegal.........fine us........we can afford it" and smiled at her.


----------



## sags

HaroldCrump said:


> It's simple, sags - _because they don't pay for it_.
> The cost is easily passed on...to the employers that provide health insurance plans to their employees.
> What do the employers do in turn?
> Yup, you guessed it...they offshore the jobs to China, India, etc.
> And, if that's not enough, they move the corporate operations to Ireland, Bermuda, Liechtenstein etc.
> 
> A health plan is the single largest cost for most small to mid-size companies in the US (keep in mind that a mid size US company is equivalent to a large cap corporate giant in Canadian terms).
> It is an even bigger line item than retirement plans (401Ks) for many companies.


Good point.

Maybe the universal health programs aren't the best idea for keeping costs down, but then again these companies would have no moral problem bankrupting someone to get medicine for their infant.

The TPP from what I have read, will make the situation worse by putting generics off for a longer period. Don't know........not an expert on that kind of stuff.


----------



## Janus

Has anyone actually been buying? Anyone think they see a bargain?


----------



## humble_pie

Janus said:


> Has anyone actually been buying? Anyone think they see a bargain?



buy? why? valeant will more likely hit 50 USD in the short term than recover smoothly now.

janus u are a smart young man, the clue to the company's long-term outlook is right on their website. Some of us are just plain tuckered out with hinting about it.

perhaps this is the trouble with CFAs, they rely too much on the numbers. No romance in the blood, no funny in the bone.


----------



## Janus

humble_pie said:


> buy? why? valeant will more likely hit 50 USD in the short term than recover smoothly now.
> 
> janus u are a smart young man, the clue to the company's long-term outlook is right on their website. Some of us are just plain tuckered out with hinting about it.
> 
> perhaps this is the trouble with CFAs, they rely too much on the numbers. No romance in the blood, no funny in the bone.


Humble, don't jump to conclusions. Read what I've written in this thread. I said the growth story is done. I have never held this stock and haven't considered it. Read my question again - i'm *asking* if anyone here has been buying the stock.


----------



## favelle75

Janus said:


> Humble, don't jump to conclusions. Read what I've written in this thread. I said the growth story is done. I have never held this stock and haven't considered it. Read my question again - i'm *asking* if anyone here has been buying the stock.


I have purely for day trading..and its been a FREAKING gem!


----------



## HaroldCrump

*An options play with Valeant gone horribly wrong*

I hope it's no one from this forum :biggrin:


----------



## KaeJS

^ Holy ****.

That's gotta hurt... 

I wrote puts last week at $60 and $70, also.
I stick to the weekly puts and try to write puts 20% below current market price.

I think $50 USD is a possibility, but it looks to me like the stock is stabilizing. Whether or not it will just be a flat spot before another leg down is a different story. 

I'm currently sitting pretty with this week's options...... so long as VRX doesn't fall more than 21% in the next 3 days then all of my options will clear in my favour. I'd say 21% over 3 days, given how the stock has acted over the last week, is pretty unlikely - but as we all know... there is always a possibility.


----------



## godblsmnymkr

http://sirf-online.org/2015/11/11/the-curious-case-of-mr-pearsons-502996-shares/
http://www.reuters.com/article/2015...law-idUSL1N1361OF20151111#s8qYhcZh8fk58Y7e.97

about par for the course for this company. no surprises here.


----------



## KaeJS

Regardless, the option chains are a beautiful thing.


----------



## Janus

Not sure if this has been posted - for anyone who thinks this was above board...

http://www.reuters.com/article/2015...ers-idUSL1N1361N720151112#XDKKuU5D3da73qhv.97

"A small cadre of employees at Valeant Pharmaceuticals International were deeply involved in directing the daily operations of a specialty pharmacy that has drawn scrutiny for its billing practices, according to four former employees at the pharmacy and company documents reviewed by Reuters."

Nothing we didn't all already suspect, but now on record from former employees.


----------



## Janus

Looks like Morgan Stanley is the first of the sell side firms to capitulate on Valeant. Target price down to $98 from $200.

Not that it matters one way or another...


----------



## KaeJS

I'm still writing options on this one.

I'm in for 15 Naked Puts. Strike $60. Premium $0.40. Nov 20 Expiry.


----------



## james4beach

High volume spike this morning as the price shoots up. I wonder if now the process has started of running in the shorts.

No stock ever drops straight down. Short positions have piled up, and at some point the stock will rally hard and squeeze out the shorts. I wonder if that's started now.

_My position:_ still long as part of my high-risk portfolio


----------



## Janus

james4beach said:


> High volume spike this morning as the price shoots up. I wonder if now the process has started of running in the shorts.
> 
> No stock ever drops straight down. Short positions have piled up, and at some point the stock will rally hard and squeeze out the shorts. I wonder if that's started now.
> 
> _My position:_ still long as part of my high-risk portfolio


Didn't know you were long. What's the experience been like holding on to this thing? I imagine it must be emotionally charged.

Citi upgraded Valeant's credit today, so it's reacting to a reduced bankruptcy risk.


----------



## james4beach

Janus, no emotion at all. Plus it's 3 shares as the test portfolio was 10K. The portfolio was somewhat automatically generated by my experimental methodology and positions are simply held for 6 months at a time and then re-evaluated. Given the price performance of VRX, there's no way it will pass my technical criteria and therefore I already know that I will close the position in late December.

On my methodology page I wrote "The effect of this procedure, re-done every 6 months, should be to eliminate the worst performers" and that's why for example, VRX won't make the cut again.

So all I do is sit and watch, and hope it rallies a bit into December.


----------



## james4beach

Janus said:


> Citi upgraded Valeant's credit today, so it's reacting to a reduced bankruptcy risk.


It's already rallied nearly 13% and this could be enough to spark a short squeeze... we'll see.


----------



## humble_pie

me i don't think valeant's surviving or thriving - if VRX survives or thrives - will have all that much to do with banks or shorts.

longterm, i think valeant's ultimate combat evacuation is related to the hints upthread (the movie.)

it always baffles me why investors prefer to remain blind to the full-blown flesh-&-blood technicolour stories that drive so many stocks. Stories, not spreadsheets. Valeant has enough songs, escape routes, rich men & dark-eyed maidens to keep a movie producer ecstatically happy for 18 months.


----------



## KaeJS

VRX is just soaring.

This is horrible for my next weeks option play. All the premiums on Puts are super low!


----------



## james4beach

Probably a short squeeze going on. It's very dangerous to be short a heavily beaten up stock. Up 30% in just 3 days.

It will be interesting to see if it does the typical thing and rallies as far as the 50 day average ($180 ish on TSX) or the 200 day average ($240 ish)


----------



## humble_pie

james4beach said:


> It will be interesting to see if it does the typical thing and rallies as far as the 50 day average ($180 ish on TSX) or the 200 day average ($240 ish)



50/200 day SMAs are nice but possibly a little bit retro, given the circumstances. The real story in VRX is somewhere else.

more hints, the movie. Here's cara delevingne as the secret agent tasked with moving western prescription drugs from albania to a staging ground in the middle east.

her operation makes philidor look like kindergarten.

offshore has always been valeant's back door escape route. It's a big route. You could drive a semi outta there.
.


----------



## humble_pie

*samesame, Novartis pays $390 fine for specialty pharmas*

*Novartis to pay $390 mln in U.S. settlement over pharmacy kickbacks*

By Sarah N. Lynch

WASHINGTON, Nov 20 (Thomson Reuters)


Novartis Pharmaceuticals Corp will pay $390 million to settle U.S. charges that it paid specialty pharmacies illegal kickbacks in exchange for inducing patients to refill certain medications, according to an accord announced Friday.

The settlement between a U.S. unit of Swiss drugmaker Novartis AG, the federal government and more than 40 states concerns payments that the drug manufacturer paid between 2007 and 2012 to certain specialty pharmacies to entice them to recommend prescriptions to Medicaid and Medicare patients.

In the settlement, Novartis admitted to a series of facts detailing its relationship with specialty pharmacies and how the alleged scheme worked.


----------



## sags

Humble..........when you peel back the onion on Valeant, what do you see ?

For me, despite listening to a lot of "expert" commentary on the company, the one that resonated the most was the forensic accountant that was on BNN awhile ago.

When you get down to it, do the numbers not tell the true tale ?


----------



## humble_pie

sags said:


> Humble..........when you peel back the onion on Valeant, what do you see ?
> 
> For me, despite listening to a lot of "expert" commentary on the company, the one that resonated the most was the forensic accountant that was on BNN awhile ago.
> 
> When you get down to it, do the numbers not tell the true tale ?




© 2015 hubbity pie sags VRX has been one of the funnest stories i've ever worked on, if only because i had an angle nobody else had. It's all in the movie script upthread. Numbers do not always tell the tell, imho. At least, there are times they do not suggest the tale as well as does a more human & holistic approach. For these kinds of stories, an investigator with a background in feature reportage will have more luck than a CFA, imho.

smart analysts have been tch tching over valeant's numbers for many years.

me i had VRX shares plus simple short calls. In 2014 i put on a gridlock of complex option strategies, though, because i noticed that the company's factories & marketing centres were all in eastern europe. Unheard of places, for a big multinational pharma. Places like bosnia, zagreb, slovakia, albania, roumania, hungary, kosovo.

albania, a global pharmaceutical epicenter? kosovo, a glittering paris of prescription pleasure? hmmmn

in 2014, the company had only one non-balkan factory. It was talking about expanding in the middle east & asia pacific.

i'll leave out the details about valeant's balkan-based staff because the comic capers are in the movie references upthread. Overseas management was mostly a bunch of british ex-pats.

many middle eastern countries ban the sale of drugs we all take for granted. Birth control pills, for example. So there would likely be a big smuggling trade. Albania is, um, a global capital of smuggling. In fact the entire Silk Road has been a nerve centre of international trade ... um, smuggling ... for thousands of years already ...

another detail that snapped the story into focus was the head office hijinks. Long ago, big valeant of california bought little biovail of mississauga purely in order to acquire the latter's offshore head office in bermuda. HQ has been moving around ever since, but it's always remained outside the US of A.

when the bust finally came in recent weeks, it only involved a small california specialty pharma named philidor. 

but i could see that, if the stateside fines & wreckage turn out to be too intense for valeant to stomach, as a last resort they'll be able to dissolve themselves & slip away. After all, they're already up & running in the profitable parts of the planet.

canadian mining tycoon Robert Friedland, discoverer of Voisey's Bay & other legendary mines, did that after he destroyed summitville in colorado.


----------



## sags

Thanks Humble.............

Most interesting scenario far deeper than the front pages of the business media provide.


----------



## humble_pie

sags said:


> Thanks Humble.............
> 
> Most interesting scenario far deeper than the front pages of the business media provide.



actually i'm one who, as u know, thinks the media do a mighty fine job! they're in those $$ seats down by the rinkside so they can watch the players' skates up close.

i don't have any arena seats like that but human beings are often resourceful creatures. In the case of valeant, i was lucky enough to have browsed their website in 2014. The unlikely - almost absurd - locations of their factories & marketing centres in the balkans sort of stood up & wagged their tails at me.


----------



## sags

It is nice to have those $$ rink side seats and watch the action up close, but one would need a hefty budget or devote all their resources for more than an occasional foray.

The media I would think is constrained on time and budget to follow stories for very long or in very much depth.

Alas, the demise of lengthy in-depth investigative journalism has been noted and sadly lamented in this corner. These days a full story consists of a few paragraphs and a short accompanying video.

Valeant has almost been a notable exception to the rules, as the WSJ, Bloomberg, Citron, and other sources have uncovered facts revealed in fairly long investigative pieces of journalism.

But I don't recall anyone reporting the Balkan factory and sales arrangements connections of which you post.


----------



## humble_pie

sags said:


> I don't recall anyone reporting the Balkan factory and sales arrangements connections of which you post.



haroldCrump. Although we didn't post in cmf forum. As i say, anyone with half a brain who looked at valeant's location profile in 2014 could not have missed it.

then by coincidence there was somebody else at the same time, posting about albanian mafia & comedy british videos (Top Gun) about albanian smuggling, which evidently is on a terrifying scale each:

we're still writing the movie script, the story is not over by a long shot. Would you happen to have any contributions to the story line, sags?


----------



## godblsmnymkr

humble_pie said:


> sags VRX has been one of the funnest stories i've ever worked on, *if only because i had an angle nobody else had.*


wow the ego


----------



## humble_pie

^^


nobody gets more indignant than a short/pump artist who just can't seem to succeed in shutting down disagreement.

it's weird how they do go on with the insults.


----------



## godblsmnymkr

mods deleted posts in this thread calling you out before. we will see if they delete this one.
HP
you dont makes sense. *what angle did you have that nobody else had?*
people ask you simple questions and you respond with meandering nonsensical answers about VRX story being like a movie and who is going to play who.
just stop posting ITT until your posts have some logic in them thanks =)


----------



## Moneytoo

godblsmnymkr said:


> ...VRX story being like a movie and who is going to play who.
> just stop posting ITT until your posts have some logic in them thanks =)


Logic is overrated :biggrin:


----------



## sags

Humble's observations on Valeant's manufacturing answered my question, and it was an angle or observation I haven't read anywhere else.


----------



## humble_pie

sags said:


> Humble's observations on Valeant's manufacturing answered my question, and it was an angle or observation I haven't read anywhere else.




sags the story is not just about valeant's manufacturies imho. It's about selling western prescription drug products into the virtually untouched markets of the middle east & africa.

in july 2015 valeant bought Amoun, egypt's biggest pharmaceutical firm, for $800 million. This gave the quebec-based multinational a firm toehold in the middle east. From Amoun, the company plans to expand throughout the region.

it's not easy marketing product in the volatile middle east. Handling the VRX launch looks to be a cadre of expat british pharmaceutical marketing personnel who are based in the balkans. A significant number now working for valeant were previously associated - out of the balkans - with smith kline beecham. 

the valeant story is only a footnote in a vast collection of emerging Silk Road stories that interest me greatly these days. The ancient Silk Road of caravans is reviving, somewhat chaotically, into a contemporary system. Russia is a key presence.

this re-appearance, after a thousand years of darkness along the ancient caravan route, hasn't broken into popular western consciousness yet. All the more reason why Silk Road stories are so intriguing!


----------



## sags

If the newest report on Valeant is true...........I am thinking a "perp walk" is not too far off into the future for some of the Valeant executives.

The claims would be a solid foundation for criminal charges for massive insurance fraud, altering a doctor's prescription and illegally using pharmacist codes.

The investigators will grab a few lower level executives and start squeezing them. The choice is a long time in prison or spill the beans.

Most people caught in that position can't talk fast enough.

http://business.financialpost.com/i...ging-ties-to-at-least-78-specialty-pharmacies


----------



## sags

I found this Humble..........don't know if you have seen it.

Too complicated for me, but I thought you might find it interesting.

http://www.bloombergview.com/articl...n-found-a-cheap-way-to-buy-more-valeant-stock


----------



## Ihatetaxes

I had sold all but 23 US shares in March and what was left is now worth $2k USD down from about $5500 in June. Glad to have gotten (mostly) out and there was zero strategic thought only to dump the last individual stock from our passive ETF portfolio.


----------



## humble_pie

sags said:


> I found this Humble..........don't know if you have seen it.
> 
> Too complicated for me, but I thought you might find it interesting.
> 
> http://www.bloombergview.com/articl...n-found-a-cheap-way-to-buy-more-valeant-stock




sags it's transparent as glass. It's clear as a bell. Ackman is bullish but practical, while claiming to be penniless apart from $74 million.

ackman thinks VRX is going to trade in a band. He sees a short-term band to early february 2016 with tighter parameters, plus a wider longer-term band to january 2017. He's put on 2 big bunches of partially naked inverted collars, he's sold some covered calls & he's pretty much doubled his leverage.

me i'd be worried about those naked feb/16 $70 puts - the inverted collars don't cover them - but i assume ackman chose the date partly because he figured the federal prosecutors could not possibly have any idea of the eventual fines valeant will have to pay by so early a date.

i think ackman's band parameters are realistic. His call positions appear to be totally covered, it's the naked puts that are worrisome. Especially since ackman says he doesn't have any cash to cover.

still, UBS is the granddaddy of european bank derivative trading. Or rather, the step-granddaddy. UBS bought the expertise when it bought the swiss bank corporation, which had been the world leader & the pioneer in options trading since the early 18th century.

so i'm assuming that, in allowing ackman to sell those naked puts, UBS & nomura had secured sufficient other assets to cover from the pershing square portfolio.

sags, if all this seems mysterious to you, all i can say is that if i had the good fortune to attend one of those hockey matches with you - we'd be sitting in those fancy seats you like down by the rinkside - you'd be understanding the players' skating & you'd be cheering them on every second.

but me i'd be sitting there clueless, like an unbaked brioche. A player could go whizzing by & i'd be thinking _What's he doing way out there all by himself._ Then you'd nudge me & point so that, finally, i'd be able to see the player collecting the puck with his stick.

what i'm trying to do is nudge you & point out where ackman is driving his puck. Just his own personal puck. What is complicating this rink is that there are so many games in progress, all on the same ice at the same time.


----------



## KaeJS

February is way too far out for me. Good luck to Mr. Ackman, though.

I'm in for some Naked Puts as well.

Dec 04/15, $85 Strike, $2 premium, 8 contracts.


----------



## Flash

Ihatetaxes said:


> I had sold all but 23 US shares in March and what was left is now worth $2k USD down from about $5500 in June. Glad to have gotten (mostly) out and there was zero strategic thought only to dump the last individual stock from our passive ETF portfolio.


Curious, but what does your ETF protfolio contain?


----------



## KaeJS

Dammit.

I should have wrote $90's. The funny thing is that I was actually debating it but figured I had to keep my risk in check. From a risk point of view, I made the right decision, but hindsight is 20/20.


----------



## humble_pie

TD securities, previously an awesome bull on valeant, still "likes" this stock, targeting a whopping USD 160 share price although that's down from prior USD 260.

the big green concludes that, while VRX's outlook is impaired by the shuttering of Philidor plus lowered pricing in Isuprel & Nitropress, nevertheless their Buy rating is "predicated on the strength and organic potential of Valeant’s operating platform, and on the company’s prospects to generate $16.16 cash EPS in F2016."

me i'm thinking that the next bad time for valeant will come as the inevitable fines are announced. Even rumours of the same will be enough to shake this delicate fish, which hovers so close to its Best Before Date & malodorous category.

the movie script goes that, if worse comes to worst, if the fines are intolerable, if too many folks stateside keep on blithering about perp walks, then valeant will simply slip silently away. They've already built a viable multinational presence. The question will be What kind of Fine will they Pay. To Stay. In the USA.


----------



## james4beach

I sold my VRX shares today. No longer have any position on the stock.

Main reason: the TSX is now in a bear market and I reduce my risk taking during bears. This was always a high risk holding and my tolerance for risk has gone down; no longer willing to gamble on a recovery.


----------



## humble_pie

^^

isn't your Prometic something more of a risk, though. I mean, valeant has hundreds of products, sales all over the world while prometic is a one pony show.

speaking of VRX products, i imagine you heard the news that company is looking to sell its contact lens division. This leaves me wondering how far along the path towards the eventual fine or fines the company has progressed. Selecting out the division to be sold suggests to me that VRX has developed a ballpark sense of the amount.


----------



## james4beach

You're right humble_pie both VRX and PLI are high-risk. I decided to get rid of one of them (I basically cut my risky-gamble portfolio in half) and generally I like sticking with winners, so I got rid of VRX.

I'll be updating my DIVZ portfolio thread shortly with a new iteration of the 6 month portfolio. With the TSX getting hammered like this, very few stocks survived the screening process. VRX is no longer eligible, for example (based on my technical criteria)


----------



## favelle75

james4beach said:


> . With the TSX getting hammered like this, very few stocks survived the screening process.


With the TSX getting hammered and more stocks going "on sale", wouldn't more stocks actually survive the screening process?


----------



## Janus

favelle75 said:


> With the TSX getting hammered and more stocks going "on sale", wouldn't more stocks actually survive the screening process?


I think he mentioned not wanting to buy stocks that have bad momentum?


----------



## james4beach

Janus said:


> I think he mentioned not wanting to buy stocks that have bad momentum?


The method, described in this other thread, requires that stocks have strong technical charts. It's not a fundamentals-based method.

The method will find high performance stocks during bull markets (when stock markets are strong) but doesn't do you too much good when you're in a bear market. See my other thread for portfolio composition and performance figures, including the new stock picks as of yesterday


----------



## humble_pie

new deal with walgreen's, stk soars 13% in new york

http://blogs.barrons.com/stockstowa...-credibility-boost/?mod=yahoobarrons&ru=yahoo

valeant also announced new lawyers plus an experienced media crisis management team, so it appears to me they are preparing for the inevitable fine(s) & they will stay stateside after all.

the fun part of the movie was always that valeant could have fled the US of A & survived offshore as a multinational pharmaceutical.


----------



## sags

Still..........without the sales from pumped up drug prices, will Valeant generate the income to meet their debt obligations ?

I think it would be good news for them if they could restructure their debt to aid in that regard. It would bolster investor confidence.

The bigger questions are if health insurers will pay the higher prices, and if generic drugs are going to get more favorable legislation to bring down drug costs.

Drugs that Valeant sells for big dollars can be replicated for pennies, if restrictions are removed.


----------



## humble_pie

^^


sags that walgreen agreement is a 20-year deal, valeant says they'll take a 10 to 50% haircut in certain derma & neuro products, walgreen will apply cost-conscious marketing & the result (they say) (we'll see) will be no increase in cost to insurers.


----------



## GoldStone

Speculator sold $900 in VRX puts on Oct 19th. Two days later, brokerage closed him out for a $149,100 loss.

:stupid:











via twitter
https://twitter.com/TheSkeptic21/status/679066775225556997


----------



## CPA Candidate

GoldStone said:


> Speculator sold $900 in VRX puts on Oct 19th. Two days later, brokerage closed him out for a $149,100 loss.
> 
> :stupid:
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> via twitter
> https://twitter.com/TheSkeptic21/status/679066775225556997


I would replace the word speculator with complete fool. A fool with access to option trading is quickly bankrupted.


----------



## humble_pie

GoldStone said:


> Speculator sold $900 in VRX puts on Oct 19th. Two days later, brokerage closed him out for a $149,100 loss.
> :stupid:





CPA Candidate said:


> I would replace the word speculator with complete fool. A fool with access to option trading is quickly bankrupted.



someone close to both of you earned $62,000 with puts in Chipotle a month ago.

he thought on the friday - i imagine his beta-weighted deltas were twitching - that CMG was a tad overpriced. He bought 10 puts.

over the weekend eight boston college basketball players clocked in sick with e-coli from Chipotle eats. The e-coli/chipotle story spread like wildfire across the US of A. Stock plummeted from $611 to $536 on the monday, close-to-you sold his puts & made off with his 62k.


Q: who are the :stupid: fools here? the one who knew what to do? or the ones who only know to taunt & jeer?


----------



## The_Tosser

humble_pie said:


> Q: who are the :stupid: fools here? the one who knew what to do? or the ones who only know to taunt & jeer?


People that can plainly see the difference between naked selling options and buying them, for one.

What a stupid comparison.

Also most people don't own a crystal ball that can tell you on Friday what will happen on Saturday. You make no sense.


----------



## humble_pie

The_Tosser said:


> People that can plainly see the difference between naked selling options and buying them, for one.
> 
> What a stupid comparison.
> 
> Also most people don't own a crystal ball that can tell you on Friday what will happen on Saturday. You make no sense.




toss do you see the difference between selling & buying options in the quoted comments? me, i see the difference but i'm not sure you see the difference ...

of course my friend made sense. Like i said, he deliberately bought CMG puts because the stock, at north of $600, was overvalued according to his metrics. Chipotle has a long history of e-coli scares. He's worked CMG options many times before. The options are actually less risky to one's health than buying a burrito at this fresh-mex-fast-food chain.

his luck was that the boston story happened the weekend after he bought puts. But no matter, another big chipotle e-coli scare story burst out only two days ago, with a string of lesser e-coli infection headlines in between. 

stock is up today on the day as the company is dealing responsibly with the e-coli setback. This time, chipotle is taking the harm to its reputation seriously, calling back a number of fresh vegetable ingredients to its head office locations, where food preparation can be supervised more rigorously than out among hundreds of local franchisors.

(tosser, speaking of fresh, perhaps you might want to consider taking the e-coli mouth down a notch) (you've only been here 2 months) (but already your insults have consigned you to a kind of isolated purgatory)


----------



## GoldStone

Some fool lost $150K selling naked VRX puts.

HP took an exception because HP knows someone who made $62K buying CMG puts. 

What kind of logic is that???

Oh... I know. Any option trade is a good trade! Doesn't matter if you win or lose. It's participation that counts.


----------



## humble_pie

GoldStone said:


> Some fool lost $150K selling naked VRX puts.
> 
> HP took an exception because HP knows someone who made $62K buying CMG puts.
> 
> What kind of logic is that???
> 
> Oh... I know. Any option trade is a good trade! Doesn't matter if you win or lose. It's participation that counts.



it's the pejorative, sneering, taunting tone of voice i was remarking. This (here we go again) (& before we go again, what does sneering at options have to do with Valeant the stock?) (if you don't like options, why don't you post against them, reasonably & intelligently, in the numerous option threads?)




GoldStone said:


> Speculator sold $900 in VRX puts on Oct 19th. Two days later, brokerage closed him out for a $149,100 loss.
> 
> :stupid:


----------



## GoldStone

GoldStone said:


> Speculator sold $900 in VRX puts on Oct 19th. Two days later, brokerage closed him out for a $149,100 loss.


^ This is just a statement of fact. There is nothing _"pejorative, sneering, taunting"_ about it.



GoldStone said:


> :stupid:


^ Is this the trigger? Me thinks you are overly sensitive. each:

BTW, the fool who lost $150K is seeking to be a lead plaintiff in the class action against VRX.


----------



## humble_pie

^^

there are probably at least 80 or 90 class actions against valeant by now, he must be lost in the crowd.


----------



## humble_pie

GoldStone said:


> Some fool lost $150K selling naked VRX puts.
> 
> HP took an exception because HP knows someone who made $62K buying CMG puts.
> 
> What kind of logic is that???
> 
> Oh... I know. Any option trade is a good trade! Doesn't matter if you win or lose. It's participation that counts.



you don't think the above is sneering & pejorative? the above is pure sweetness & light? .each:

btw your skeptic's linked blogspot shows how far-reaching & how deep is the US DOJ's current investigation into food industries & drug industries in the US of A, in which perspective the Valeant affair is not even the tip of the iceberg. Thank you so much for the link .each:


----------



## GoldStone

humble_pie said:


> btw your skeptic's linked blogspot shows how far-reaching & how deep is the US DOJ's current investigation into food industries & drug industries in the US of A, in which perspective the Valeant affair is not even the tip of the iceberg. Thank you so much for the link .each:


So glad that I can be of help!!


----------



## humble_pie

speaking of selling naked puts, there's a cmffer right in this thread who's been selling nervy close-to-the-money naked puts in Valeant for some time now. 

me i would never in a million years do what he does. The number of contracts is too high for my comfort, the strike prices are too high, the entire operation is a tightwire act without a safety harness.

but dang, he's been nailing them. One bunch of puts after the other. 

right here. under your nose.


----------



## GoldStone

humble_pie said:


> speaking of selling naked puts, there's a cmffer right in this thread who's been selling nervy close-to-the-money naked puts in Valeant for some time now.
> 
> me i would never in a million years do what he does. The number of contracts is too high for my comfort, the strike prices are too high, the entire operation is a tightwire act without a safety harness.
> 
> but dang, he's been nailing them. One bunch of puts after the other.
> 
> right here. under your nose.


That person should re-read Taleb. The section on skewed distributions in "Fooled by Randomness".

Short synopsis via Wikipedia:

============

Skewed distributions. Many real life phenomena are not 50:50 bets like tossing a coin, but have various unusual and counter-intuitive distributions. An example of this is a 99:1 bet in which you almost always win, but when you lose, you lose all your savings. People can easily be fooled by statements like "I won this bet 50 times". According to Taleb: "Option sellers, it is said, eat like chickens and go to the bathroom like elephants", which is to say, option sellers may earn a steady small income from selling the options, but when a disaster happens they lose a fortune.

============

https://en.wikipedia.org/wiki/Fooled_by_Randomness


----------



## Moneytoo

humble_pie said:


> (but already your insults have consigned you to a kind of isolated purgatory)


You mean his 5 star volatility thread with 5K+ views?


----------



## humble_pie

GoldStone said:


> That person should re-read Taleb. The section on skewed distributions in "Fooled by Randomness".
> 
> Short synopsis via Wikipedia:
> 
> ============
> 
> Skewed distributions. Many real life phenomena are not 50:50 bets like tossing a coin, but have various unusual and counter-intuitive distributions. An example of this is a 99:1 bet in which you almost always win, but when you lose, you lose all your savings. People can easily be fooled by statements like "I won this bet 50 times". According to Taleb: "Option sellers, it is said, eat like chickens and go to the bathroom like elephants", which is to say, option sellers may earn a steady small income from selling the options, but when a disaster happens they lose a fortune.
> 
> ============
> 
> https://en.wikipedia.org/wiki/Fooled_by_Randomness




this is the quintessential weakness of anonymous wikipedia. Nassim Taleb did *not* say that option sellers may earn a steady small income from selling the options, but when a disaster happens they lose a fortune.

the anonymous dude writing the paragraph *about* Taleb said that. The dude was just opining. He thought he was interpreting Taleb. He was wrong.

i could just as easily say that knowledgeable option sellers earn a steady income from selling options & when a disaster happens they are always well hedged.

my friend who collected $60 grand during a chipotle e-coli breakout knows he had a lucky break, of course. 99% of the time he's hedged. An easy coffee break routine for him is downloading the full chain of US options in goldcorp into a spreadsheet, then searching for possible conversion strategies.

in a conversion, [(buy stock + sell call) - buy same strike put] will add up to less than the strike price of the options. As in [(11.80-1.68) + 1.81 = 11.93]. In this strategy, $11.93 is going to produce $12, guaranteed. Goldcorp dividends paid along the way are extra gravy.

conversions are hard to find because, theoretically, they should not happen. The trick is to keep repeating a lot of these 11.93 jobs in order to capitalize on the volume.

i don't do conversions because it would take me too long to carry out the search. But he's perfected the search for conversions into a few seconds. 100 of these little devils will produce $700, zero risk, every week, as they mature. That's $36,400 a year, zero risk, in return for 2-3 minutes work per day.

for someone who knows how.

taleb's wiki editor in your distorted "which is to say" quote doesn't know how.


----------



## GoldStone

Post #257:



humble_pie said:


> speaking of selling naked puts, there's a cmffer right in this thread who's been selling *nervy close-to-the-money naked puts* in Valeant for some time now.
> 
> ...
> 
> but dang, he's been nailing them. One bunch of puts after the other.
> 
> right here. under your nose.


Taleb's idea applies to a T. Said cmffer can be right 100 times in row. It's not the proof of skill. It's just the nature of skewed distribution. Said cmffer can blow up any time, just like the fool who lost $150K.

Your post #260 is a different story altogether. Different strategy, different distribution of risks.


----------



## peterk

humble_pie said:


> in a conversion, [(buy stock + sell call) - buy same strike put] will add up to less than the strike price of the options. As in [(11.80-1.68) + 1.81 = 11.93]. In this strategy, $11.93 is going to produce $12, guaranteed. Goldcorp dividends paid along the way are extra gravy.
> 
> conversions are hard to find because, theoretically, they should not happen. The trick is to keep repeating a lot of these 11.93 jobs in order to capitalize on the volume.
> 
> i don't do conversions because it would take me too long to carry out the search. But he's perfected the search for conversions into a few seconds. 100 of these little devils will produce $700, zero risk, every week, as they mature. That's $36,400 a year, zero risk, in return for 2-3 minutes work per day.
> 
> for someone who knows how.
> 
> taleb's wiki editor in your distorted "which is to say" quote doesn't know how.


Neat. Is this similar to what someone on the forum was talking about years ago with costless collars? If I recall he was eking out ~2% in guaranteed returns instead of 1% for interest rates and was using this strategy as the fixed-income cash portion of his portfolio? Your colleague is doing the same thing but in a much more sophisticated way and managing to squeeze out a 30% guaranteed return, before commissions (in your fictitious above example), due to market inefficiencies? Is that a realistic outcome or were your example numbers a bit optimistic?

How long do these conversion inefficiencies last? an hour? minutes? seconds? Is the risk here that you go long the stock and before you can buy your put and sell your call the arbitrage vanishes? or the stock rapidly drops and you aren't yet protected?

Wow, that was a lot of question marks!...

Someday I'll start dabbling in options, I'm sure, when I have more money, perhaps. Maybe in 2017 or 18...


----------



## humble_pie

GoldStone said:


> Post #257:
> 
> 
> Taleb's idea applies to a T. Said cmffer can be right 100 times in row. It's not the proof of skill. It's just the nature of skewed distribution. Said cmffer can blow up any time, just like the fool who lost $150K.
> 
> Your post #260 is a different story altogether. Different strategy, different distribution of risks.




but in message 260 i was replying to the notion you introduced yourself with your wikipedia editorial comment that stated "sellers of options."

all sellers of options. Your wiki interpreter of nassim taleb did not introduce any conditional phrases stating that some or many option sellers are hedged & covered. What the interpreter said - note, not taleb himself, but an anonymous editor - is that sellers-of-options-will-lose-fortunes-when-disaster-happens.

me i sought to counter that idea, because it's false. I set up an example from a friend who hedges as naturally as he breathes. I usually also hedge, although not as cleverly as the friend, who likes to say that "options are much less risky than stocks," due to the fact that they are usually traded in strategies, ie they are hedged.

turning once more to the naked valeant put sells that are showcased higher up in this thread, as i mentioned i'd never do those in a million years. They are far too nervy. Too many contracts, too high a strike price. Most dangerous of all is the absence of a counter position, ie there is no long put that will bracket the risk to a few dollars per share of the underlying.

those VRX puts are likely soaking up the entire account margin in that one trade. He's not a particularly experienced option trader. Alas the Taleb comment does apply to that case, you are right.

sometimes in cmf forum we see new option traders who think that selling naked puts is paradise. It's free money at last. What they don't seem to realize is that, when the market in their particular stock collapses & their short puts are exercised against them, the probability is high that the entire market will have also collapsed. IE the margin buying power they thought they had from the rest of the account has suddenly phhhhhtt disappeared.

then the broker has to liquidate.


----------



## dime

sags said:


> Still..........without the sales from pumped up drug prices, will Valeant generate the income to meet their debt obligations ?


The insanely high debt load was mainly whats kept me from buying shares when it was doing well as a stock. The 'viagra for women' sounds like a huge loss and risk to the company as well. If they ever get back to a reasonable debtload I'd take a closer look.


----------



## KaeJS

In keeping with the theme, I wrote some more Naked Puts on VRX today. Juicy premiums due to the whole Medical issues.

HP - Completely understandable in regards to what you are saying given puts, margin and risk involved. However, it is still less risky than purchasing stock outright even if you do not hedge.

Now, for one who believes in the future of Valeant (myself) and wouldn't mind being long the stock (at a reasonable price) then why would someone not want to write naked puts?

I mean... look last week at BNS. BNS was trading just under $56. I cleaned house on some beautiful $56 Naked Puts and I would do it all over again. Who wouldn't want to own BNS at $56?

The same applies to Valeant.

Just because someone (myself) writes some risky naked put options does not mean that I do not know the risks.

I have always been (and always will be) honest and open on this forum. I have even posted in one of the threads on this forum ("Worst trade of 2015") that I lost $22k in August using Naked Puts. Does this bother me? No. I know the risks. As an aside, that full $22k was all profit from the first part of 2015, anyway. In fact, even losing that $22k, I was still up 9% for the year. Since losing that $22k in August, I have recovered $14k.

Choosing one strategy over another does not mean you are not aware of the risks. It means you are willing to accept the risks. Could I have done some Iron Condors and reduced my risk? Sure. Could I have purchased some puts to reduce my loss in the event the stock plummeted? Sure. But I rather take the (small risk, in my opinion) and write some nakies clean and clear.


----------



## humble_pie

me i think perhaps mike pearson was permanently pushed out.

i wonder who did it? how many of them were in the posse? ackman comes to mind, but normally one would expect to find at least 2 or 3, possibly large shareholders, all acting in concert ...

meanwhile "interim" haha ceo howard schiller says the company will not do any more new deals in the short term, will instead look to repairing its debt position. No inkling yet of the size of the fine VRX can expect.

more negative news trickling out today re a possibly tainted relationship with another small pharma distributor. This suggests that the federal prosecutors are still beavering away at building the fine.


----------



## Twixer

It is a broken business model (they admitted that by signing deal with Walgreens). It will take a lot of time to build a new one specially with high debt. They are now focused on lowering debt, helping government reduce healthcare cost, and improving traffic at Walgreens. I don't think that is particularly attractive investment opportunity at this point.


----------



## godblsmnymkr

http://www.reuters.com/article/us-sequoia-valeant-idUSKCN0UP23120160111 
hedge fund Sequoia getting sued over valeant stake at 32% of fund when no position is supposed to be over 25%.
possible that this could have something to do with the huge amount of selling in VRX lately.


----------



## CPA Candidate

VRX may restate past financial statements as a result of revenue recognition review. This just keeps getting worse, hit again in after hours.

http://business.financialpost.com/i...review-likely-linked-to-philidor-sales-report


----------



## Dividend Beginner

This has been an absolute disaster of a stock... Currently down about 70% on my investment. Thanks Pearson.


----------



## Janus

Dividend Beginner said:


> This has been an absolute disaster of a stock... Currently down about 70% on my investment. Thanks Pearson.


Sorry but people had a choice to *not* invest in a stock that had risen 1,300% in 5 years, with an unsustainable acquisition strategy, and a policy of not disclosing any of the accounting. Serious value investors didn't touch this thing.

Once again... the model is broken.


----------



## GoldStone

Janus said:


> Serious value investors didn't touch this thing.


A few did. For example, take a look at how much Lou Simpson owns, and he added a ton in Q4 2015.

http://www.dataroma.com/m/holdings.php?m=SQ

http://www.dataroma.com/m/hist/hist.php?f=SQ&s=VRX


----------



## Janus

GoldStone said:


> A few did. For example, take a look at how much Lou Simpson owns, and he added a ton in Q4 2015.
> 
> http://www.dataroma.com/m/holdings.php?m=SQ
> 
> http://www.dataroma.com/m/hist/hist.php?f=SQ&s=VRX


I don't know Lou Simpson, but I know ValueAct was a huge shareholder as well, and people take them seriously as value investors. So it's hard to say. But everyone I know in the community saw it as a "don't touch, they're clearly not telling us the whole story" kind of name.


----------



## humble_pie

it's interesting how the financial industry professionals in cmf keep congregating in this thread to bash valeant.

i suppose you guys or your friends were shorting again?

in any event, the immediate shorting opportunity has blown over. It appears VRX will be moving earnings from one fiscal year to the next. Full details to be revealed at the conference next week. According to Reuters:

_" The restatement will reduce its reported 2014 GAAP earnings by about 10 cents per share and increase 2015 GAAP earnings by about 9 cents per share, Valeant said.

" 'We view this as a marginal impact and certainly not one that warranted the significant pressure late in the day and after market yesterday,' Stifel analyst Annabel Samimy wrote in a client note."_


----------



## godblsmnymkr

humble_pie said:


> it's interesting how the financial industry professionals in cmf keep congregating in this thread to bash valeant.
> 
> i suppose you guys or your friends were shorting again?
> 
> in any event, the immediate shorting opportunity has blown over. It appears VRX will be moving earnings from one fiscal year to the next. Full details to be revealed at the conference next week. According to Reuters:
> 
> _" The restatement will reduce its reported 2014 GAAP earnings by about 10 cents per share and increase 2015 GAAP earnings by about 9 cents per share, Valeant said.
> 
> " 'We view this as a marginal impact and certainly not one that warranted the significant pressure late in the day and after market yesterday,' Stifel analyst Annabel Samimy wrote in a client note."_


whats interesting HP, is that you continue to defend this POS stock all the way down. this is an apple that is most likely rotten to the core. their business model was immoral and unsustainable. when are you going to sack up and finally sell off your shares to preserve some capital?
its your money though, do what you want.


----------



## GoldStone

Janus said:


> I don't know Lou Simpson


http://www.bloomberg.com/news/artic...-opens-florida-firm-after-retiring-from-geico


----------



## humble_pie

godblsmnymkr said:


> whats interesting HP, is that you continue to defend this POS stock all the way down. this is an apple that is most likely rotten to the core. their business model was immoral and unsustainable. when are you going to sack up and finally sell off your shares to preserve some capital?
> its your money though, do what you want.




lol when have i ever defended valeant .each:

VRX has great options. Great big fat juicy premiums. Created by the volatility from all the pumpster/bashers. Thankx.


----------



## godblsmnymkr

you're obviously trolling at this point
now breaking news they are under investigation be the SEC.
i wonder when the next BNN fluff piece on Valeant will be out?


----------



## Janus

godblsmnymkr said:


> you're obviously trolling at this point
> now breaking news they are under investigation be the SEC.
> i wonder when the next BNN fluff piece on Valeant will be out?


It's not worth your time mate.

This story just keeps getting better.


----------



## humble_pie

godblsmnymkr said:


> you're obviously trolling at this point
> now breaking news they are under investigation be the SEC.
> i wonder when the next BNN fluff piece on Valeant will be out?



VRX has been under investigation for months, you didn't know?


----------



## Janus

humble_pie said:


> VRX has been under investigation for months, you didn't know?


It's a separate investigation from what was ongoing before, hence the stock being down 20%. Love the snarky tone, though.


----------



## james4beach

The options premiums must be juicy. This is the most volatile large cap in Canada!

I have no position though, sold back at $128.


----------



## humble_pie

Janus said:


> It's a separate investigation from what was ongoing before, hence the stock being down 20%.



not at all, it's the same investigation, ongoing as you mention. It would extend also to canada's IMET since valeant is a canadian company & all cross-border issues are shared between the 2 authorities.


----------



## CPA Candidate

Watching the hedge funds get annihilated on VRX is beautiful. And the equity analysts pounding the table last summer, tripping all over themselves to raise targets, are now tripping all over themselves to cut them and distance themselves. The issue is, all the information was there all along they just chose to ignore the issues and go with the stock flow. Some analysis.

This is a story for the annals of history. Be skeptical and stop listening to Bay St, they are all part of the game. It doesn't take a fancy education to see that the company barely made any real profits (other than adjusted non-sense metrics), was loaded up with debt to the extreme, could not continue to make acquisitions like they had been and was basically a profiteer on illness.

With the stock destroyed, acquisitions are over and the bad publicity will crimp the ability to raise prices or even maintain them. VRX could easily go bankrupt.


----------



## james4beach

It's still worth $26 billion so I wouldn't be too quick to assume its demise


----------



## Hippie

james4beach said:


> It's still worth $26 billion so I wouldn't be too quick to assume its demise


Just recently bought a bunch. Swing trading. We'll see how that goes, I don't generally panic.
Peace.


----------



## godblsmnymkr

CPA Candidate said:


> Watching the hedge funds get annihilated on VRX is beautiful. And the equity analysts pounding the table last summer, tripping all over themselves to raise targets, are now tripping all over themselves to cut them and distance themselves. The issue is, all the information was there all along they just chose to ignore the issues and go with the stock flow. Some analysis.
> 
> This is a story for the annals of history. Be skeptical and stop listening to Bay St, they are all part of the game. It doesn't take a fancy education to see that the company barely made any real profits (other than adjusted non-sense metrics), was loaded up with debt to the extreme, could not continue to make acquisitions like they had been and was basically a profiteer on illness.
> 
> With the stock destroyed, acquisitions are over and the bad publicity will crimp the ability to raise prices or even maintain them. VRX could easily go bankrupt.


it took me 3 articles on seeking alpha on about 45mins of due diligence last summer to realize this is something I want to avoid. i have no idea how people that manage billions of dollars are in it.


----------



## james4beach

Unbelievable!! They're saying they're facing default risk, absolute surprise to the market
http://www.reuters.com/article/us-valeant-pharms-results-idUSKCN0WH144

Down 47%


----------



## Janus

What's so unbelievable? These guys have $31bn in debt and don't have a sustainable business model. (Not that I saw this coming.)

This is too fascinating. I'm interested to see how this affects Ackman and the Sequoia fund, the 2 largest shareholders who made it roughly 30% of their portfolios.


----------



## hboy43

I wonder what is make believe: projected earnings of ~$10/share or sp $50? Or both?

If I happen to be holding the next company that (temporarily) knocks RY out of first place on the TSX, I think I will run like hell from it.


----------



## Janus

hboy43 said:


> If I happen to be holding the next company that (temporarily) knocks RY out of first place on the TSX, I think I will run like hell from it.


The curse is very real.


----------



## james4beach

Still, this heavy selling is probably hitting everyone's stops. There might be a rebound to catch here. One of the best traders among my friends loaded up on VRX this morning. Just as a short term trade

I have no position


----------



## Hippie

james4beach said:


> Still, this heavy selling is probably hitting everyone's stops. There might be a rebound to catch here. One of the best traders among my friends loaded up on VRX this morning. Just as a short term trade
> 
> I have no position


Ya, I bought some at $117 on the way down expecting a quick trade and a few bucks. Didn't plan on this. Guess I don't have a lot of choice except to hang on and see where it goes. The news doesn't seem to be getting better though.


----------



## james4beach

Hippie said:


> Guess *I don't have a lot of choice* except to hang on and see where it goes.


You have lots of choice. You can buy, sell, or hold.


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## sags

Trading volume on the downside is 3.5 million compared to an average around 500,000 shares a day.


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## blin10

wow, 15 billion worth of stock wiped out in a single day


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## Eder

As usual the herd overshoots ... should be good trade here...to risky for me though...pseudo company and all that.


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## Twixer

james4beach said:


> Still, this heavy selling is probably hitting everyone's stops. There might be a rebound to catch here. One of the best traders among my friends loaded up on VRX this morning. Just as a short term trade
> 
> I have no position


I think chances for a rebound are solid here. I bought today.

Didn't like how traded the last hour but still it was too tempting.


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## doctrine

$31B in debt and revenue guidance dropping fairly dramatically. I don't know why anyone would hold on to this. Some analysts predicted $30-40 for the stock price a few months ago, doesn't seem so far off.


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## kcowan

On Monday, O'Leary said on BNN it was a toxic stock that he would not touch. On Tuesday, he was back to gloat at its 50% meltdown.


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## Janus

doctrine said:


> $31B in debt and revenue guidance dropping fairly dramatically. I don't know why anyone would hold on to this. Some analysts predicted $30-40 for the stock price a few months ago, doesn't seem so far off.


As of yesterday there were only 2 sell recommendations on this stock out of... 26+ analysts.


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## AltaRed

Janus said:


> As of yesterday there were only 2 sell recommendations on this stock out of... 26+ analysts.


As we all know, analyst recommendations are about the same accuracy as a flip of a coin.


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## james4beach

Stock analysts are a total joke. They keep recommending disastrous stocks even while they crash -- as a group, they are perpetual bulls. I've never understood who listens to their opinions and "target prices" (hilarious).

Go back to any bear market and look at a list of analyst recommendations and you'll die laughing


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## Beaver101

^


> *Stock analysts are a total joke*. ...


 ... so what are they good for?


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## AltaRed

Beaver101 said:


> ^ ... so what are they good for?


They only serve to cheerlead business (and get media attention) for their respective employers.


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## godblsmnymkr

funny that humble_pie is nowhere to be seen.
some people would rather lose money then be wrong.


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## besmartrich

I am bidding at $30. Another 30% down. If executed, this will be my another fun&let's go crazy once in a while speculative stock.


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## jollybear

Should the fact there was no "dead cat bounce" yesterday after such a massive selloff be a warning sign there is more doom and gloom for Valeant ahead?


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## Janus

godblsmnymkr said:


> funny that humble_pie is nowhere to be seen.
> some people would rather lose money then be wrong.


Too busy making fat option premiums. Winning on the upside *and* the downside, baby!


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## CPA Candidate

CPA Candidate said:


> This company is just a giant financial engineering (finance) experiment, much like CSU. The growth will stall and the multiple will collapse at some point but the massive leverage will still be there.


August 8th, 2015. 

Look at how ahead of the curve I am. I should become a short seller.

And the only analyst that had a sell rating on Valeant the whole time it was going up was.....an accountant and former auditor. http://www.veritascorp.com/about/team/Dimitry.html


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## doctrine

jollybear said:


> Should the fact there was no "dead cat bounce" yesterday after such a massive selloff be a warning sign there is more doom and gloom for Valeant ahead?


Yes. Down another 20% in the last few days since the big 50% drop. When stocks drop nearly 90% in less than a year, they rarely recover. At 7% a year growth moving forward from here, it would take a decade to hit the August 2015 high.


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## Beaver101

AltaRed said:


> They only serve to cheerlead business (*and get media attention*) for their respective employers.


 ... yes, that's correct, branding the reputation of their firms. Beneficial to know.


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## humble_pie

Janus said:


> Too busy making fat option premiums. Winning on the upside *and* the downside, baby!




then there was the option trading baby who came whining to cmf forum when the $18 put he'd greedily sold in Teck B fell deep into the money days 2 days before expiration ... wa'aaaaa'aah he wailed, as it dawned upon him that, within a couple days, the broker was going to force him to pay $18 for teck shares that were trading far below that price level ... boo'hoo'hoo what'll i doo wept option baby into cmf forum ...

carefully, patiently, politely, i explained how to roll his loser position down into US put options at a lower strike price, without losing a cent. I offered real-life trading examples that i'd taken the trouble to research for option baby's benefit. I explained why - with only 2 days to expiration - he had to act immediately if he wanted to rescue his capital & protect his margin position.

alas options trading baby never understood one iota. In spite of the fancy diploma in finance that he boasts about so frequently on here, it was sadly transparent that baby had never grasped step numero uno in options trading.


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## humble_pie

jollybear said:


> Should the fact there was no "dead cat bounce" yesterday after such a massive selloff be a warning sign there is more doom and gloom for Valeant ahead?



imho the real grief won't come until the doj announces the fines for vrx


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## Janus

humble_pie said:


> then there was the option trading baby who came whining to cmf forum when the $18 put he'd greedily sold in Teck B fell deep into the money days 2 days before expiration ... wa'aaaaa'aah he wailed, as it dawned upon him that, within a couple days, the broker was going to force him to pay $18 for teck shares that were trading far below that price level ... boo'hoo'hoo what'll i doo wept option baby into cmf forum ...
> 
> carefully, patiently, politely, i explained how to roll his loser position down into US put options at a lower strike price, without losing a cent. I offered real-life trading examples that i'd taken the trouble to research for option baby's benefit. I explained why - with only 2 days to expiration - he had to act immediately if he wanted to rescue his capital & protect his margin position.
> 
> alas options trading baby never understood one iota. In spite of the fancy diploma in finance that he boasts about so frequently on here, it was sadly transparent that baby had never grasped step numero uno in options trading.


I've never bought or sold an option in my life... you might have me mixed up with janus10?


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## OptsyEagle

Wow, this is becoming quite the dog. 

I know almost nothing about the situation. I am just glad that it has finally been reduced to being just a little bit of stock market noise to my TSX ETF. I am not sure if it is a testament to indexing or a reason to avoid doing it.


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## OptsyEagle

So they determined that all the problems at Valeant should be blamed on the guy that left. So all is OK now. Glad they got to the bottom of that one.


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## AltaRed

OptsyEagle said:


> So they determined that all the problems at Valeant should be blamed on the guy that left. So all is OK now. Glad they got to the bottom of that one.


For a large part, Pearson was the problem with his growth strategy. So it is a start to dump the CEO responsible for where the company is at, and re-build with someone shareholders might gain confidence in. Trouble is, he will likely be paid off in spades rather than be thrown to the wolves.

P.S. I have never had a stake in this company. It simply is not the kind of company I'd invest in.


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## OptsyEagle

I agree. I am watching this from the sidelines. Kind of hard not to hear the news about it. 

I try hard to avoid the "growth by acquisition" companies. They really do work exactly like a pyramid scheme. They take their high PE company's stock and buy lower PE businesses or assets. That transaction is immediately accretive to earnings and the stock goes up. They rinse and repeat this process again and again, with management and most investors thinking that they are all a bunch of geniuses. The problem is, like the pyramid scheme it is, they eventually run out of accretive acquisitions or they stumble for some reason, taking away their high PE on their stock (cheap capital) and presto the story ends with a lot of shareholder crying.


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## Numbersman61

Improper accounting practices and former CFO claims to not have any responsibility - "it was the controller's fault".


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## godblsmnymkr

waiting with bated breath for the BNN fluff piece talking about shorts targeting the stock on unsubstantiated claims and that all is well with the company. I wonder what BNN got for the last one?


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## humble_pie

valeant has been such a happy & profitable holding for me.

my VRX shares are sleepy old biovail purchased at prices ranging from $11-15. Continuous option trading over the years has reduced the cost base to below zero.

i could never sell any shares because the sheer size of the looming capital gains was far too daunting. Instead, a few years ago i took to donating valeant shares to charities. The original idea had been to raise the cost base, but soon the activity became a cherished pursuit in its own right.

every year, a block of shares worth 5 figures would be delivered to a charity. Hospitals, community service organizations. Last year was a tiny NGO working with farmers in 3rd world countries. Once again, the great spirit sped this project on its way. Somehow i had the inspiration to direct the broker to deliver the valeant shares to the charity in late may 2015, shortly before VRX would reach its record all-time high share prices.

i have this belief, see, that as long as i will always donate my valeant shares for charitable tax receipts - as long as i will never sell any valeant shares for personal profit - then my VRX holdings plus their contingent option sales will keep renewing enough value. Every year, they will rise at least enough to generate the option trading that will form another substantial donation. Something along the lines of the biblical story of the loaves & the fishes.

i can't let the charities down, i've grown fond of them. Especially the tiny farmers' NGO.


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## sags

I always suspected there was more to Humble than just the Pie............


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## RBull

Good for you HP.


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## kcowan

RBull said:


> Good for you HP.


+1


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## arc

Is anyone else doing a collar play on this stock?


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## james4beach

Amazing, humble_pie !


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## Mechanic

arc said:


> Is anyone else doing a collar play on this stock?


What's a collar play ?


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## steve41

Its an S&M thing.


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## hboy43

steve41 said:


> Its an S&M thing.


Often seen with a limit order: "You must run your hands up my legs to HERE, but no further."


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## OptsyEagle

I thought is was the act of losing 90% of your investment in a stock and then collaring a rope around your neck and kicking out the chair. lol.


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## Infinity7

Do you think that appointment of William Ackman to the board is positive or negative for the stock? Will he bring any value?


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## hollyhunter

VRX.TO rose over 9% yesterday with good volume. %K line is on top of %D line, that is a good sign. Technically, the next resistance is located at 100.33.


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## humble_pie

steve41 said:


> Its an S&M thing.



a strangle could be less deadly than a collar, provided it's wide enough.

resistance at 100.33 looks too tight, the company has to face the doj, a relaxed fit brotee would fit best

.


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## james4beach

> The makers of Cold-fX are in court today fighting allegations they ignored their own research and misled consumers about the short-term effectiveness of the popular cold and flu remedy.
> 
> Valeant Pharmaceuticals will oppose an application in British Columbia Supreme Court to grant the lawsuit class-action status.


http://www.cbc.ca/news/business/cold-fx-class-action-lawsuit-1.3519345

Notice, however, ColdFX appears to be effective when taken longer term


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## NewBrunswick

I bought in at $37.77, I'm very happy with my timing as it's already up over 20% on the rebound.


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## mreconomic

This is exaclty the type of oportunity I always talk about to my clients... When a company has dropped in price for certain problems in their balance sheet, it is common to see how they solve the situation and go back to their historical medium price in a couple of years... even more when talking about the Pharm.Sector...


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## NewBrunswick

mreconomic said:


> This is exaclty the type of oportunity I always talk about to my clients... When a company has dropped in price for certain problems in their balance sheet, it is common to see how they solve the situation and go back to their historical medium price in a couple of years... even more when talking about the Pharm.Sector...


Thanks Mr.Economic, glad I made a wise purchase.


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## humble_pie

NewBrunswick said:


> Thanks Mr.Economic, glad I made a wise purchase.



idk, this is the new wise? a newcomer with 16 posts raves about a tattered stock with a dodgy reputation that dates back 3 years in this thread, so now u believe that purchase is wise ??

i tend to think that VRX could survive on its global business even if the US dept of justice fines it out of existence stateside. But i am not sure.


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## NewBrunswick

humble_pie said:


> idk, this is the new wise? a newcomer with 16 posts raves about a tattered stock with a dodgy reputation that dates back 3 years in this thread, so now u believe that purchase is wise ??
> 
> i tend to think that VRX could survive on its global business even if the US dept of justice fines it out of existence stateside. But i am not sure.


Call it dumb luck then, either way I'm happy.


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## yyz

I'm sorry but mreconomic has terrible spelling.Hard to believe he is an educated financial guy with clients like he seems to be claiming to be?

like here
"There is a cool website that recently has been doing a great job analizig the world's economy... "

"Take a look to Anadarko Petroleum Corp... great potencial to double its price in the next year or so"

"It is impossible to trade without fees and comitions."

Come on thats someone you'd trust with money?


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## cevans

is anyone still following/ holding onto Valeant? - bought my position at 34.03 - so will have to drop a bit more for me to be real concerned - anyone care to make predictions?


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## redsgomarching

i really want to pick it up. valeant was one of the first trades i made and i made about 2 grand off of them in my tfsa my first year of trading when they were on that massive acquisition spree and the stock price went up huge!

too much crap going on for me and now that they are in the headlines everyone is watching for them, they seem to have become a target. would not send my soldiers there yet


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## none

NewBrunswick said:


> I bought in at $37.77, I'm very happy with my timing as it's already up over 20% on the rebound.





NewBrunswick said:


> Thanks Mr.Economic, glad I made a wise purchase.





NewBrunswick said:


> Call it dumb luck then, either way I'm happy.


Still happy? LOL


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## yyz

mreconomic apparently recommends this site 

http://canadianmoneyforum.com/showt...esting-or-Guru-Services?p=1115746#post1115746

http://smartfinancemag.com/


Of which his profile says he is the owner.Sounds like advertising to me. Just wish he'd learn how to spell and at least try to look professional.


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## NewBrunswick

none said:


> NewBrunswick said:
> 
> 
> 
> I bought in at $37.77, I'm very happy with my timing as it's already up over 20% on the rebound.
> 
> 
> 
> 
> 
> 
> NewBrunswick said:
> 
> 
> 
> Thanks Mr.Economic, glad I made a wise purchase.
> 
> Click to expand...
> 
> 
> 
> 
> NewBrunswick said:
> 
> 
> 
> Call it dumb luck then, either way I'm happy.
> 
> Click to expand...
> 
> Still happy? LOL
> 
> [iurl="http://canadianmoneyforum.com/attachment.php?attachmentid=10466&d=1465355782"]
> 
> 
> 
> 
> 
> 
> 
> [/iurl]
Click to expand...

I'll own up to that. It's a complete gamble owning shares.


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## Mortgage u/w

cevans said:


> is anyone still following/ holding onto Valeant? - bought my position at 34.03 - so will have to drop a bit more for me to be real concerned - anyone care to make predictions?


Maybe I'm too conservative, but I would never touch this stock. I'll admit I was very tempted - but that was my gambling side talking. If I acted upon my temptation, I would have bought when it was soaring in the $100 range. Glad my common sense side talked me out of it.

I've lost faith in this company - not even sure why I still follow it. They are billions in debt and will soon have to start selling off assets if the company does not start delivering good news. 

Stay away. Once stock is tainted, good luck recovering.


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## doctrine

cevans said:


> is anyone still following/ holding onto Valeant? - bought my position at 34.03 - so will have to drop a bit more for me to be real concerned - anyone care to make predictions?


Valeant just set two new 52 week lows in the last two days. They have 15 times debt to cash flow, for which the cash flow is at risk. There is $30B of debt in absolute terms. The stock trades at 8.6% of the all time high. There have been accounting issues and management credibility issues. They have lowered their own guidance. The brand name is toxic and causing customers to drop them like a hot rock. Solvency should be the question that is asked. There is no reason to own this. It is toxic waste.


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## hollyhunter

VALEANT PHARMACEUTICALS INTL IN (VRX.TO) has an ongoing P/E of 17.42, seems still undervalued.


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## fstamand

So I have a dozen positions that I bought just before the "stock crash". I'd really love to get back some of this (I know, not a huge amount, but still). As a exit strategy would throwing more money at it (on a dip) would work ? I know, gamble.


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## 30seconds

Why throw more money at a stock that has lost you money? Just to bring your average share price down? The stock price is trending downwards and I see no signs of it jumping up. 

Pick a better stock, do more research and make up your losses that way.

If you want to take a gamble any weed stock seems like a better choice for fast gains then VRX.


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## james4beach

I ditched VRX back in 2015 (due to technical analysis -- don't tell me T/A is useless) but still watch it because it's such a dramatic story.

What is everyone thinking about this? Will it collapse to zero and delist, or stay afloat?


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## doctrine

Everything about this stock is screaming at best recapitalization or very likely bankruptcy. It has a $5B market cap, and almost $30B in debt. You could pick a dozen other financial metrics that show this company is just hanging on, and that assumes they can actually maintain margins and revenue, which is almost certainly impossible given lack of R&D (and kiss those margins goodbye if they actually start R&D, and how long will that take to generate results?) Any actual rise in stock price would result in immediate share issues. This stock is down 95%. The market is speaking...capital has been permanently destroyed and is not coming back.


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## james4beach

Isn't it amazing how often giant stocks collapse into nothing (NT, VRX, BBD.B) and yet, the stock index still reliably goes up over time. That will never cease to amaze me.

NT was once 25% of the TSX 60
VRX was about 5%
BBD.B was about 5% too - maybe more?

And yet, the TSX 60 has outperformed all of these very significantly


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## CPA Candidate

james4beach said:


> I ditched VRX back in 2015 (due to technical analysis -- don't tell me T/A is useless) but still watch it because it's such a dramatic story.
> 
> What is everyone thinking about this? Will it collapse to zero and delist, or stay afloat?


You got on the VRX bandwagon because of T/A and now you hail how good T/A is for getting you out? Fundamentals dictate changes in stock prices. T/A is a lagging signal. The shorts that went against the VRX T/A momentum bandwagon got rich off VRX.


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## james4beach

CPA Candidate said:


> You got on the VRX bandwagon because of T/A and now you hail how good T/A is for getting you out? Fundamentals dictate changes in stock prices. T/A is a lagging signal. The shorts that went against the VRX T/A momentum bandwagon got rich off VRX.


True that T/A is a lagging signal, but it also "tells you" what other market participants are doing and what they collectively think, and I think there's value in hearing that story.

What do people think of VRX now? There was a rally attempt from May - July, but that seems to have sputtered and fizzled out. Maybe worth shorting here around $15.44 ?


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## doctrine

VRX is definitely technically weak. I'm not into shorting, but it is hard for me to see how this company has any equity. Almost every asset sale they have made has been at significant discount to purchase price. Debt is still over 5 times market capitalization. It does seem like the market isn't convinced there isn't something worthwhile remaining, so I think you can read into the technicals that confidence is dropping.


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