Long-suffering Valeant Pharmaceuticals Intl Inc (ticker: VRX) stock got a vote of confidence Thursday from activist investor ValueAct Capital Management.
ValueAct disclosed in new SEC filings that the firm recently purchased 3 million shares of Valeant stock. ValueAct paid $10.88 per share for 500,000 shares and $10.81 for another 2.5 million.
ValueAct is currently Valeant’s second-largest investor after activist investor Bill Ackman disclosed earlier this week that he sold his 27.2 million-share stake in the company. Valeant shares plummeted following Ackman’s exit and were down 6.4 percent on the week prior to ValueAct’s disclosure.
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In the past two years, Valeant shares have crashed from an all-time high of $263.81 in mid-2015 to less than $11 this week.
Valeant has faced intense media scrutiny for its drug pricing policies and business model. In Febraury 2016, the company disclosed a SEC probe related to its dealings with specialty pharmacy Philidor RX Services.
Despite the minefield of obstacles, Ackman had remained committed to Valeant prior to this week. When he finally abandoned the position, his Pershing Square fund took roughly a $3 billion loss. Ackman’s exit makes ValueAct’s buying even more important for Valeant’s reputation.
“ValueAct is signaling to the market that they think it is a positive factor that Pershing Square is no longer a shareholder,” 13DMonitor says in a new research note.
In the filing, ValueAct says the company believes Valeant shares were “undervalued and represented an attractive investment opportunity.”
ValueAct’s stake in Valeant now represents roughly 5.2 percent ownership of the company.
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While Ackman first took his position in Valeant in 2015, ValueAct has been an investor since 2006. When Ackman was buying shares near all-time highs, ValueAct sold $1 billion of Valeant stock in 2015. At the time, ValueAct had earned a 2,100 percent return on its original investment in the company.
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Valeant Pharmaceuticals Intl Inc (VRX) Gets a Vote of Confidence originally appeared on usnews.com
