- Beaten down Valeant Pharmaceuticals (VRX +5.1%) is slowly trying to regain some degree of upward momentum after bottoming at $8.36 on April 21. Shares popped 8% early in the session on the news that hedge fund star John Paulson joined the board.
- Bloomberg Gadfly columnist Max Nisen says the move may not be much help to either Mr. Paulson, underwater ~$1B with his stake, or the company. Given his track record in pharma, there is scant evidence that he can reprise his colossal win with credit default swaps about a decade ago. Eight of his nine positions listed in the article, about half of his holdings, are losers so far.
- His Valeant position is down about 90%, but he is undeterred, adding 10M shares in the past two years.
- Mr. Nisen cites the example of hedge fund honcho Bill Ackman, who also had a board seat. lost big and bailed out after the company failed to show any hint of a turnaround. Mr. Paulson has a steep hill to climb to break even, considering the company's stifling debt of $28.5B and stagnant core business.
- Now read: Valeant: Was Inova Sale The Worst Deal Ever?
Original article