Investor activist Bill Ackman and his Pershing Square Capital Management (PSH) firm, famous for their fight against Herbalife (HLF) which they deemed a pyramid scheme, would have lost up to USD 2.8 billion.
Holding approximately 18.1 million shares and 9.1 million call options of Valeant Pharmaceuticals International Inc. (VRX), Pershing Square allegedly sold the whole at around USD 11.25 per share, at a loss of approximately 93%.
Valeant accounted for approximately 2.3% of the total assets under management of Pershing Square valued at USD 11 billion. Ackman once tried unsuccessfully to acquire Allergan, the inventor of the Botox aesthetic product, in cooperation with Valeant which was then valued at nearly USD 90 billion in 2015.
A few months later, Valeant was worth only the tenth of it after controversial revelations on the artificial increase in the prices of its medicines. Despite his ongoing HLF’s short sale and his severe setbacks in recent years in the retail sector with JC Penney (JCP) and Target (TGT), Ackman remains a leading investor.
If Pershing Square posted a net loss of 20.5% in 2015, it gained 40.4% in 2014. About 90% of the positions currently held by Pershing Square would be long (on the upside).