Healthcare Ackman's Exit Sends Valeant Pharmaceuticals Intl Inc (VRX) Shares to Greater Than 7-Year Low

Ackman's Exit Sends Valeant Pharmaceuticals Intl Inc (VRX) Shares to Greater Than 7-Year Low

Published By News Desk at March 15, 2017 08:41 am Valeant Pharmaceuticals’ recent loss of Bill Ackman’s investment serves as a point of caution for the investors going forward

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) shares have already plunged more than 80% over the past 12 months and 25% since the beginning of the year. However, the company got its last blow when Bill Ackman pulled his investments out of the beleaguered drug maker and sold his final stake. Consequently, VRX shares declined more than 10.07% during active trading yesterday. The pharmaceutical currently has 341.19 million shares outstanding in the market with a daily stock value of $10.5-11.04 and 52-week value of $10.5-70.43.


Only last week, Valeant announced credit facility amendments and restructuring of its certain interest maintenance covenants. The drugmaker increased its aggregate offering by $750 million to $3.25 billion. Under this amendment, the offering now includes $1.25 billion of 6.50% of senior secured notes due 2022 and $2 billion of 7.00% senior secured notes due 2024. With this development, the $3.66 billion company had hoped to dramatically cut down its debt load and repurchase about $1.1 billion of its 6.75% senior secured notes due 2018.


While the recent amendment served as a ray of hope for its investors, Bill Ackman’s recent actions darkened things for the company once again. Ackman’s Pershing Square recently announced the sale of its final stake in the company, after a huge tax loss of over $5 billion. The firm decided that Valeant required disproportionate amounts of time and resources. Therefore, by selling VRX stake, the firm can now give more attention to its existing investments alongside exploring new opportunities. However, it sent VRX shares down to their more than 7-year low.


Wall Street analysts have maintained the average 12-month price target of $19.31, with 77% upside potential over the last close. Furthermore, the company has also attained three Buy, one Overweight, 14 Hold, one Underweight, and three Sell ratings from the analysts covering the stock at FactSet Fundamentals