feynmanresearch Posted November 1, 2015 Share Posted November 1, 2015 If anyone is interested in sharing their opinion on Valeant, feel free to message me. I'm writing up a case study Link to comment Share on other sites More sharing options...
original mungerville Posted November 1, 2015 Share Posted November 1, 2015 So is the LA TIMES article what Citron was saying they were going to release Monday or do you guys think there is incremental to that article... Citron was saying something product-related, said Philidor was now old news. Link to comment Share on other sites More sharing options...
Picasso Posted November 1, 2015 Share Posted November 1, 2015 I was long at 115. Sold at 230 and tried a couple times to get long at 165 and 110. Got stopped at at small losses but overall netted around 80%. Link to comment Share on other sites More sharing options...
Guest Schwab711 Posted November 1, 2015 Share Posted November 1, 2015 Or something related to this: http://theskeptic21.blogspot.nl/2015/11/valeant-needs-more-cowbell.html Citron redeemed or lucky? Link to comment Share on other sites More sharing options...
TonyG Posted November 1, 2015 Share Posted November 1, 2015 Anyone see this yet? http://www.wsj.com/articles/valeant-short-seller-dials-back-warning-of-bombshell-report-on-monday-1446417120 Link to comment Share on other sites More sharing options...
original mungerville Posted November 1, 2015 Share Posted November 1, 2015 Yeah I would say the R&O dispute is anything but standard. You have to look at everything Pearson did under the idea of creating "maximum shareholder value." It's easy to see why they conduct their business is a particular fashion. In many cases it's penny wise pound foolish. What I would worry about as a shareholder is the pressure this puts on the board keeping Pearson as CEO. They literally just raised guidance for 2015 a couple weeks ago and now it's looking like there's almost no way for them to get close to 2016 guidance. One analyst tried asking what the impact would be to 2016 EBITA and he was silenced by investor relations and Pearson didn't even answer the question properly. Actually the two questions by the analyst were probably the best ones during the entire Q&A: Doug Miehm - RBC Capital Markets Thank you. Couple questions as well. Number one, with respect to patient access and foundations, maybe you could walk us through how many foundations you fund. And of those foundations what proportion of their annual operating budget would you provide to them? The second one just has to do with, if you were to split out the US neuro business, can you give us a sense of what EPS contribution or EBITDA contribution that business would have? And I'll leave it there. Laurie Little - Head of IR Hey guys, why don't you just concentrate just a couple right now. We are trying to get through everybody so why don't we answer the - Mike Pearson - Chairman and CEO Yes, pick your two favorite. Douglas Miehm Just the foundations, just elaborate on that. Mike Pearson - Chairman and CEO Okay. So it is -- I don't have the price number but it's like four or five and so its small number. We make sure as we mentioned that they have other companies are also contributing or other organizations, so these are also contributing, we do not want to be the only one to contribute. Again, we just given the money and they do what they want to with that money. And I don't have -- I don't want to give you a price figure in terms of what percent of our funding, I don't have that and I don't want to guess. Next question? So the stock is getting killed and you don't have time to answer a couple questions? Maybe there's a simple explanation like they have better things to do, but the optics look bad. There's just a lot of this kind of stuff when you look at the past year. Maybe Valeant can buy Theranos for a billion and we'll get two businesses that pick and choose what they want to disclose and questions they want to answer. If a long is hoping Pearson gets fired and ValueAct fixes up the company, how exactly is that supposed to play out? Half the shareholders are in Valeant because of Pearson. You go from an "Outsider" company to a collection of businesses with no more fat to cut and a nasty mess to clean up. Any guidance goes completely out the window. The worse this looks and if any of it reflects directly back to Pearson, the higher the likelihood of losing support from the board. I also find it somewhat strange that we have not heard a peep from ValueAct. Even with Morfit back on board, he didn't even give a typical statement of support behind Pearson or the company. It's like he's also refraining judgement until he finds out exactly what went on at Philidor. Pearson dragged the whole board into the conference call, said the board toured Philidor when they did the deal. Then, with a lawsuit ongoing, they set up an independent committee to look at the situation (we'll either buy it out, or stop doing biz with them), and a journalist uncovers wrong-doing there in the last week or two, the industry effectively shuts it down, and only then does Valeant disassociate from Philidor? The board is not going to be happy here, nor are Sequoia, Ackman, ValueAct, etc if they find out what appears to be the case here. This could get really really ugly in court. No wonder S&P downgraded them on Friday citing weak controls. The bears saw a familiar pattern and smelled something (they cited the wrong things however and so were not terribly convincing), and the longs trusted Pearson and have seen this same pattern workout before. I think before the Allergan battle, Pearson may not have cared as much about "organic growth" and during that battle, Allergan cited Valeant's lack of growth and so Pearson decided he needs to have growth - bought higher growth biz like Salix, ramped up Philidor, bought Marathon. Its really going to come down to whether the board decides to throw Pearson under the bus, and say goodbye to billions of dollars and clients; or whether they stand behind him (not because necessarily because they trust him, but because they have billions of client money on the line). The cynic in me can't be sure of the outcome. If they stick together, they battle it out in courts, and they can probably keep the train rolling. But this could get ugly. Link to comment Share on other sites More sharing options...
thefatbaboon Posted November 1, 2015 Share Posted November 1, 2015 Nearly every pharma company has engaged in dodgy sh*t. Not many businesses are run by Buffett. Don't know why everyone is getting their panties in a twist. Most of this stuff is just allegations and inuendo at the moment anyway. With various boobs on the Internet trying to analyse stuff they don't understand. Even if valeant is 100% guilty of everything they have been accused of by this bored and the press it only puts them in the company of EVERY pharma company. One would think we cobf investors were a bunch of neophytes who had never heard of jnj, bmy, Novartis, davita, Glaxo etc etc. These companies have stuffed channels , defrauded insurance, bribed, mislabelled. At the worst valeant has defrauded insurance, gamed some pharmacy numbers, skirted laws to sell into ca, in order to sell some extra fungus cream and what not. It doesn't even put them on the same damn page as what most of the other pharma guys have done! And personally I don't want to jump to conclude that what valeant has done is illegal. It might be, it might not be. This is business guys, and most of them are trying to walk the line between jail and getting paid. And pharma in particular stinks all the way through from the circus they call drug trials all the way through to reimbursement. In my book valeant sells silly medicine aggressively and maybe to the point of law breaking. Every major pharma other than valeant has sold not-silly medicine and has killed people and broken the law. Valeant is a mere babe. I think the valeant owner can take solace from the following. Many valeant assets have been recently underbid by third parties. Giving one a third party valuation. Assets are in also in various different therapies and countries. In contradistinction to subprime/banking, even worst case it's hard to see how these assets evaporate. On the negative side: there's nothing so hysterical and enraged as Americans who have lost money. It's better to kill a few people that lose a few billions. And at the moment valeant has lost people a lot of money. Madoff got a hundred life sentences. The jnj, Novartis or gsk guys whose criminal fraud and avarice led directly to lost life - they get easily digestible fines. Personally I don't own the company because I don't like drug companies because I don't like spending my days reading about diseases. If I did I'd be looking very closely at valeant. Link to comment Share on other sites More sharing options...
LongHaul Posted November 1, 2015 Share Posted November 1, 2015 This may be the next bomb to go off if true. Sounds like a very good chance it is real to me as there are too many little details. http://www.cafepharma.com/boards/threads/fake-sales-at-vrx-too.586197/ "I'd like to say that this loading is not just in Poland and Baltics. It is everywhere in Valeant in Europe. It is also in Slovenia, Croatia and Serbia, where Valeant has big business. Loading is incredible high in Serbia. And the loading is far more what normal companies do measured as percentage yearly sales. Local wholesalers complain they have trouble storing all the medicines Valeant place with them! When loading really bad at end of year it goes to maybe 30%-35% of yearly sales. This year probably be even worse. It is all centrally coordinate from Prague HQ and New Jersey. We cannot understand how auditors allow it. I wanna say that it is a bad situation, stressful and unpleasant, and the bosses don't care and are stealing from the company. The boss of Slovenia/Croatia/Bosnia fired the people who reported his stealing scam. He fired the people (six Finance and Logistic women in Slovenia) after he survived a fake investigation organized by the Boss of Finance Europe and the Boss of Compliance Europe -- it was fake because investigation was suppose to be surprise "flashed" audit but somehow everyone was warned a week before, so there was time for big cover-up was completed. This was fake investigation and 100% violate Valeant compliance rules but no one says nothing. Afterward, Boss of Europe Finance supported firing of whistleblower! Amazing. Cover-up allowed the thief boss of Slovenia to survive the audit. This is the way Valeant company is run. Boss of Slovenia was defend by his boss, who runs all SE Europe and everyone think they stealing together. We don't know if Boss of Europe understands truth, but he allow all this games to happen including firing of whistleblower without compensation and he never does nothing. Except sell his stock options every minute. Maybe he too involved or just doesn't care? No honesty and no professional approach." Link to comment Share on other sites More sharing options...
cmlber Posted November 1, 2015 Share Posted November 1, 2015 Can anybody here point me to one thing they are 100% sure is illegal and was done by Philidor? Not something that seems shady, something that is clearly illegal. Is anyone sure that using multiple pharmacy IDs until one gets reimbursed is illegal? Why would they write that in a training manual distributed to 1,000 employees if it was illegal? Is there any incentive to do so? If that's illegal and they wrote it in the manual, these would be the dumbest fraudsters ever. Link to comment Share on other sites More sharing options...
original mungerville Posted November 1, 2015 Share Posted November 1, 2015 Or something related to this: http://theskeptic21.blogspot.nl/2015/11/valeant-needs-more-cowbell.html Popcorn time baby! No, this is the Philidor shitfest we already know about - we already know its a moral disaster zone. Link to comment Share on other sites More sharing options...
original mungerville Posted November 1, 2015 Share Posted November 1, 2015 Anyone see this yet? http://www.wsj.com/articles/valeant-short-seller-dials-back-warning-of-bombshell-report-on-monday-1446417120 This guy at Citron first says "Hey, I don't care if you sue me, bring it on". He is tweeting shit on Friday for Monday, but now he is hiding behind his lawyer's opinion? Fuck man, how can you take these guys seriously even if they are ultimately roughly right? And as it stands (unless a lot more facts come out), I have a hard time trusting management even if ultimately Valeant recovers. Further, the big investors and board members are now sucked into this thing and so they too have a huge vested interest. Link to comment Share on other sites More sharing options...
sampr01 Posted November 1, 2015 Share Posted November 1, 2015 Or something related to this: http://theskeptic21.blogspot.nl/2015/11/valeant-needs-more-cowbell.html UPS recycles Tracking numbers, Blogger used tracking number as a fraud evidence. :o Link to comment Share on other sites More sharing options...
original mungerville Posted November 1, 2015 Share Posted November 1, 2015 Nearly every pharma company has engaged in dodgy sh*t. Not many businesses are run by Buffett. Don't know why everyone is getting their panties in a twist. Most of this stuff is just allegations and inuendo at the moment anyway. With various boobs on the Internet trying to analyse stuff they don't understand. Even if valeant is 100% guilty of everything they have been accused of by this bored and the press it only puts them in the company of EVERY pharma company. One would think we cobf investors were a bunch of neophytes who had never heard of jnj, bmy, Novartis, davita, Glaxo etc etc. These companies have stuffed channels , defrauded insurance, bribed, mislabelled. At the worst valeant has defrauded insurance, gamed some pharmacy numbers, skirted laws to sell into ca, in order to sell some extra fungus cream and what not. It doesn't even put them on the same damn page as what most of the other pharma guys have done! And personally I don't want to jump to conclude that what valeant has done is illegal. It might be, it might not be. This is business guys, and most of them are trying to walk the line between jail and getting paid. And pharma in particular stinks all the way through from the circus they call drug trials all the way through to reimbursement. In my book valeant sells silly medicine aggressively and maybe to the point of law breaking. Every major pharma other than valeant has sold not-silly medicine and has killed people and broken the law. Valeant is a mere babe. I think the valeant owner can take solace from the following. Many valeant assets have been recently underbid by third parties. Giving one a third party valuation. Assets are in also in various different therapies and countries. In contradistinction to subprime/banking, even worst case it's hard to see how these assets evaporate. On the negative side: there's nothing so hysterical and enraged as Americans who have lost money. It's better to kill a few people that lose a few billions. And at the moment valeant has lost people a lot of money. Madoff got a hundred life sentences. The jnj, Novartis or gsk guys whose criminal fraud and avarice led directly to lost life - they get easily digestible fines. Personally I don't own the company because I don't like drug companies because I don't like spending my days reading about diseases. If I did I'd be looking very closely at valeant. +1 This is exactly correct. We sit here pissed. But at the end of the day, they were delaying the release of information with respect to selling toe nail polish and other mild drugs into CA using what are likely illegal or at a minimum highly highly questionable means. The pharma industry stinks (I would rank them a very very close second to brokerages/ibanking or maybe its worse because lives are at stake), JNJ was knowingly selling a drug that killed older people and grew boobs on boys for fuck sakes and all they got was a billion dollar fine. This is why I really don't like this situation. Economically, it'll probably work out. Maybe this is a big wake-up call for Pearson: Marathon and now Philidor. Maybe it makes Valeant stronger going forward and the stock less risky at this price. I'm going around in fuckin' circles on this one at this point. If the board and major shareholders don't throw him under the bus, its probably a buy. And they have a huge vested interest which makes me think they will not. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted November 1, 2015 Share Posted November 1, 2015 And as it stands (unless a lot more facts come out), I have a hard time trusting management even if ultimately Valeant recovers. Further, the big investors and board members are now sucked into this thing and so they too have a huge vested interest. That's my problem too. Even if you do all mathematical adjustments like say the fine will cost them this, or the sales decline will be 7%, etc... etc... That still leaves you with the ship's captain who will neglect to tell you when there are serious allegations of widespread fraud and will not change course. He will just charge along and let the eventual legal tab just keep piling up. Let's say that in a parallel world Andrew Left had died in his infancy of a rare disease. Would Philidor's doors be open today for business? YOU BET THEY WOULD. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted November 2, 2015 Share Posted November 2, 2015 Then, with a lawsuit ongoing, they set up an independent committee to look at the situation (we'll either buy it out, or stop doing biz with them), The most damning thing (in my eyes) about this part of the story is that it wasn't when R&O stopped paying them for accusations of widespread fraud that this independent investigative committee was set up to take a look at Philidor... It was when it hit the newspaper. Several months later! Somebody's kid went to school and heard about the story, came home and said "Daddy, are you going to jail?". To which the father said "No sweety, nobody in big pharma goes to jail. Stop watching so many movies, the real world doesn't work like that." Link to comment Share on other sites More sharing options...
rb Posted November 2, 2015 Share Posted November 2, 2015 The thing with Valeant is that if Philidor is really the only cockroach and they can get back the confidence of the markets and get back to business as usual they may very well do ok. It may even be a buy. The thing is that I'm a very well off guy. I don't see why I need to buy everything that is a buy. There are so many companies out there and I don't need to be affiliated with one that does business this way. I don't know why anyone else needs to either. I also don't care that others in the industry behave unethically as well. That's ok I don't need to be affiliated with those either. Let me extrapolate this situation to real life. I could definitely make more money if I behave unethically towards my clients. My personal IRR would go up. But I wouldn't do that. So why should I do it through a third party? What's amazing is that a lot of Valeant shareholders have the same view as me regarding ethics in real life. They wouldn't do anything like Valeant does. But they have no problem partnering with Valeant and profiting from its doings and even defending it after it. Link to comment Share on other sites More sharing options...
rb Posted November 2, 2015 Share Posted November 2, 2015 Here's a new one. http://www.bloomberg.com/news/articles/2015-11-01/munger-isn-t-done-bashing-valeant-after-months-of-holding-nose couldn't find the actual interview. Would be nice if someone had. Link to comment Share on other sites More sharing options...
feynmanresearch Posted November 2, 2015 Share Posted November 2, 2015 The thing with Valeant is that if Philidor is really the only cockroach and they can get back the confidence of the markets and get back to business as usual they may very well do ok. It may even be a buy. The thing is that I'm a very well off guy. I don't see why I need to buy anything that is a buy. There are so many companies out there and I don't need to be affiliated with one that does business this way. I don't know why anyone else needs to either. I also don't care that others in the industry behave unethically as well. That's ok I don't need to be affiliated with those either. Let me extrapolate this situation to real life. I could definitely make more money if I behave unethically towards my clients. My personal IRR would go up. But I wouldn't do that. So why should I do it through a third party? What's amazing is that a lot of Valeant shareholders have the same view as me regarding ethics in real life. They wouldn't do anything like Valeant does. But they have no problem partnering with Valeant and profiting from its doings and even defending it after it. I definitely agree with what you are saying. There's so many people who are willing to overlook Valeant's behavior if it means they can continue on making money. It reminds me of Tony Soprano in the Sopranos and how his shitty behavior was ignored by his wife because it kept her lavish lifestyle going Link to comment Share on other sites More sharing options...
ccplz Posted November 2, 2015 Share Posted November 2, 2015 If you are old enough, you will recall the 60s and early 70s when the corporate Earth was ruled by great beasts named Bluhdorn (Gulf+Western), Ling (LTV), Riklis (Rapid American) and others who acquired everything in sight and used accounting nonsense to paint up earnings until the game ended and they collapsed. Those beasts died an ugly death, their companies passed away and the Earth was saved. That is, until Enron and Tyco and some others emerged earlier this century. And now we have the most modern of modern day beasts, Valeant, run no less than by a "McKinsey Master of the Universe." Same old stuff, different day. The only disappointment that I have about Valeant is that money managers who I respect could not help themselves and bought millions of shares of this trash. Shame on them. And shame on people like gio who keep trying to pump up this stock. Well a lot has happened this month. Link to comment Share on other sites More sharing options...
blainehodder Posted November 2, 2015 Share Posted November 2, 2015 I didn't know Lowenstein was Chairman of Sequoia. I wonder if he will write the sequel to When Genius Failed? When Genius Failed 2: Philidor Drift. Could help offset some losses. Link to comment Share on other sites More sharing options...
Guest Schwab711 Posted November 2, 2015 Share Posted November 2, 2015 This may be the next bomb to go off if true. Sounds like a very good chance it is real to me as there are too many little details. http://www.cafepharma.com/boards/threads/fake-sales-at-vrx-too.586197/ "I'd like to say that this loading is not just in Poland and Baltics. It is everywhere in Valeant in Europe. It is also in Slovenia, Croatia and Serbia, where Valeant has big business. Loading is incredible high in Serbia. And the loading is far more what normal companies do measured as percentage yearly sales. Local wholesalers complain they have trouble storing all the medicines Valeant place with them! When loading really bad at end of year it goes to maybe 30%-35% of yearly sales. This year probably be even worse. It is all centrally coordinate from Prague HQ and New Jersey. We cannot understand how auditors allow it. I wanna say that it is a bad situation, stressful and unpleasant, and the bosses don't care and are stealing from the company. The boss of Slovenia/Croatia/Bosnia fired the people who reported his stealing scam. He fired the people (six Finance and Logistic women in Slovenia) after he survived a fake investigation organized by the Boss of Finance Europe and the Boss of Compliance Europe -- it was fake because investigation was suppose to be surprise "flashed" audit but somehow everyone was warned a week before, so there was time for big cover-up was completed. This was fake investigation and 100% violate Valeant compliance rules but no one says nothing. Afterward, Boss of Europe Finance supported firing of whistleblower! Amazing. Cover-up allowed the thief boss of Slovenia to survive the audit. This is the way Valeant company is run. Boss of Slovenia was defend by his boss, who runs all SE Europe and everyone think they stealing together. We don't know if Boss of Europe understands truth, but he allow all this games to happen including firing of whistleblower without compensation and he never does nothing. Except sell his stock options every minute. Maybe he too involved or just doesn't care? No honesty and no professional approach." Nice find, you beat me to this. This is going to be the real bomb in my opinion. Link to comment Share on other sites More sharing options...
feynmanresearch Posted November 2, 2015 Share Posted November 2, 2015 I didn't know Lowenstein was Chairman of Sequoia. I wonder if he will write the sequel to When Genius Failed. hahaha Link to comment Share on other sites More sharing options...
Munger_Disciple Posted November 2, 2015 Share Posted November 2, 2015 Another article in FT: http://www.ft.com/intl/cms/s/0/c5519d9e-807c-11e5-a01c-8650859a4767.html?ftcamp=traffic/partner/feed_headline/us_yahoo/auddev Link to comment Share on other sites More sharing options...
thefatbaboon Posted November 2, 2015 Share Posted November 2, 2015 And as it stands (unless a lot more facts come out), I have a hard time trusting management even if ultimately Valeant recovers. Further, the big investors and board members are now sucked into this thing and so they too have a huge vested interest. That's my problem too. Even if you do all mathematical adjustments like say the fine will cost them this, or the sales decline will be 7%, etc... etc... That still leaves you with the ship's captain who will neglect to tell you when there are serious allegations of widespread fraud and will not change course. He will just charge along and let the eventual legal tab just keep piling up. Let's say that in a parallel world Andrew Left had died in his infancy of a rare disease. Would Philidor's doors be open today for business? YOU BET THEY WOULD. Eric do you know enough to be so shrill? Isn't every large corporation subject to payment disputes? Do you know enough here to be so indignant? I really think everyone needs to relax a bit and wait till there's something solid. Philidor bought a pharmacy in California so it can sell drugs in California. The California. Pharmacy then is used to sell drugs in California. The guy then refuses to remit the payments back up the chain. The whole thing is structured via options for legal distance. (How is that different than using bankruptcy remote Corp. or using sub contractors or whatever) Not a thing of moral beauty to be sure. This valeant matter has become completely ridiculous. Valeant has scarcely even been ACCUSED of anything criminally noteworthy, let alone convicted, and who the hell thought this company was some kind of Buffett type Angel. It's a normal business in a crappy industry doing normal things for that industry. Link to comment Share on other sites More sharing options...
feynmanresearch Posted November 2, 2015 Share Posted November 2, 2015 And as it stands (unless a lot more facts come out), I have a hard time trusting management even if ultimately Valeant recovers. Further, the big investors and board members are now sucked into this thing and so they too have a huge vested interest. That's my problem too. Even if you do all mathematical adjustments like say the fine will cost them this, or the sales decline will be 7%, etc... etc... That still leaves you with the ship's captain who will neglect to tell you when there are serious allegations of widespread fraud and will not change course. He will just charge along and let the eventual legal tab just keep piling up. Let's say that in a parallel world Andrew Left had died in his infancy of a rare disease. Would Philidor's doors be open today for business? YOU BET THEY WOULD. Eric do you know enough to be so shrill? Isn't every large corporation subject to payment disputes? Do you know enough here to be so indignant? I really think everyone needs to relax a bit and wait till there's something solid. Philidor bought a pharmacy in California so it can sell drugs in California. The California. Pharmacy then is used to sell drugs in California. The guy then refuses to remit the payments back up the chain. The whole thing is structured via options for legal distance. (How is that different than using bankruptcy remote Corp. or using sub contractors or whatever) Not a thing of moral beauty to be sure. This valeant matter has become completely ridiculous. Valeant has scarcely even been ACCUSED of anything criminally noteworthy, let alone convicted, and who the hell thought this company was some kind of Buffett type Angel. It's a normal business in a crappy industry doing normal things for that industry. Enough with the justifications dude Link to comment Share on other sites More sharing options...
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