Today’s conference call, even by Ackman’s standards, was long. He started speaking at around 9 a.m. in New York, a half hour before the opening of the stock market. A steady stream of digressions left listeners confused about what exactly he was trying to achieve. There were frequent references to the room being too cold and comments on oil drilling, chess and the media’s dislike of hedge funds. There was even an, apparently unscripted, reference to JPMorgan Chase’s Jamie Dimon, upon whom Ackman bestowed the title of "the best person in the world." It was 1 p.m. by the time he finished, and the stock was showing no signs of turning around.
Valeant’s bonds declined, with the company’s 2025 debt falling 3 percent, the most in a month, to 84.12 after Standard & Poor’s Ratings Services downgraded the company’s rating to "B+" from "BB-".
The “multitude of legal, regulatory, and reputational issues that Valeant faces" was behind the cut, analysts led by David Kaplan said in a note to clients Friday. Reports of wrongdoing at Philidor "weakens Valeant management’s credibility, further harms the company’s already tarnished reputation" and exacerbate potential legal, regulatory, and reputational headwinds for the company, the analysts said.
"There is a lot of headline risk there for investors," said Mark McCabe, a credit analyst at KDP Investments Advisors Inc. "And is the the tip of the iceberg? You just don’t know. So there will be more pain in the short term."