As Pearson outlined his plans to “earn back the credibility” of Valeant, the company corrected a press release it had issued hours before, saying that one measure of earnings would actually be lower than it had stated.
Pershing Square Capital responded by telling investors it planned to take a much larger role at Valeant, acknowledging that investors have lost “total confidence in the company,” contributing to the stock drop. An early sign of Pershing Square’s increased involvement came last week, when Vice Chairman Steve Fraidin joined Valeant’s board.
Despite the slide in the stock since Pearson returned to the helm of the drugmaker just two weeks ago, Pershing Square Capital remains supportive of the Valeant CEO, according to a person familiar with the situation, who asked not to be identified discussing private information.
Hedge Fund
When Pershing Square posted its weekly performance through March 15, it wasn’t pretty: net asset value per share fell to $15.42, compared with $20.96 at the end of 2015 -- a 26.4 percent drop. Pershing Square also said Wednesday it cut its stake in Mondelez International Inc. to 5.6 percent, as the maker of Oreo cookies was performing better than other its investments. The block sale of 20 million shares was “for portfolio management purposes only,” according to a statement.
Despite Ackman’s conviction that he knows how to handle Valeant, investors continue to shun the company. Shares closed Thursday at their lowest price since January 2011.