CONeal Posted October 21, 2015 Share Posted October 21, 2015 Started looking at this today and have 1 question that I hope longs can answer. How are you comfortable investing in this company when they can't provide the most basic financial report, a balance sheet? What is the reason why they can't provide one? When Fairfaix was going through their issue was they still providing all financial material? (I wasn't around then to know) they don't release a balance sheet? how's that possible ? I'm pretty sure i saw it from their quarterly release. that's what I've been seeing comments about. not able to actually dig into until tonight to verify but have seen references regarding this. Link to comment Share on other sites More sharing options...
Picasso Posted October 21, 2015 Share Posted October 21, 2015 Their earnings press release doesnt have a balance sheet. Obviously it is in the Q's and K's. Link to comment Share on other sites More sharing options...
luck Posted October 21, 2015 Share Posted October 21, 2015 wow. now down 37% today alone. donville kent, one of canada's top funds (20% annualized) recommended this as one of their top picks also as of october 19th (after the earnings report). have yet to see any stock with so many well-respected hedge funds in it take this kind of a beating. as of last quarter, value act, sequoia, paulson, pershing, brave warrior, hound, marble arch, ratan, lou simpson, donville kent. valueact's ubben is also on the board of the company. if it is a fraud, pearson has pulled one on some well-financed teams. Link to comment Share on other sites More sharing options...
gary17 Posted October 21, 2015 Share Posted October 21, 2015 Their earnings press release doesnt have a balance sheet. Obviously it is in the Q's and K's. so if we wait a few days the Qs will come out with a balance sheet ? what's the rush to make an investment decision today ! Link to comment Share on other sites More sharing options...
original mungerville Posted October 21, 2015 Share Posted October 21, 2015 Isn't investing into this stock now similar to just going to the casino and playing black or red (well it could be 0 or 00 too I guess) at the roulette table? There is no way we can know whether this is fraud or not at this point and personally I can not see how anyone can invest in this circumstances. Investing based on character... I don't know, I guess I'd pass on that as well... Just my quick thoughts... The thing is, if you defend a stock fiercely with hundreds of posts (even a few rage-fuelled caps-locked rants in which you call people 'fucking idiots') you maneuver yourself into a position in which it is extremely hard to change your mind. Your subconscious doesn't want you to look like a fool in public so when new information comes out you have a strong tendency to change your thesis rather than your opinion. I'm not even saying the initial thesis was wrong - just that it has changed from '25% growth into perpetuity' to a 'character judgement' in a few weeks. Textbook example of thesis creep. The reason I invested in VRX in the first place is because I really liked Pearson, his past actions, and the way he responded to various questions during the Allergan take-over attempt. I still believe that 20-25% growth is a good estimate, nothing has changed. At the multiple I was willing to pay, the bet was on the business model and Pearson, that's still the bet. In addition now, we are going to find out for sure if there is fraud or not. It won't take long from here. My judgement is that there probably is not a huge fraud committed by Valeant where Pearson was fully aware of it. I could be wrong, but it comes down to judgment of character because 20-25% growth won't happen if there was major pervasive fraud, obviously. I stated I was doubling down, and posted that that was solely based on my judgement of character of Pearson versus the group attacking him. I wanted to state that so that other posters don't necessarily buy based on my actions or thinking I am basing my decision on anything more than that. To me the 20-25% growth holds on the assumption Pearson is not involved in some major fraud. Link to comment Share on other sites More sharing options...
luck Posted October 21, 2015 Share Posted October 21, 2015 with the stock down close to 40% in a day, pearson has to say something soon you'd imagine. Link to comment Share on other sites More sharing options...
tylerdurden Posted October 21, 2015 Share Posted October 21, 2015 Each minute that VRX is taking for coming out with their press release, the probability that this is a very severe situation is increasing... It's really hard to think they tricked all those famous investors at once... Link to comment Share on other sites More sharing options...
TonyG Posted October 21, 2015 Share Posted October 21, 2015 It could also be taking a while because they are probably going to come back with facts rather than the usual guilty CEO's who just blame the shorts. Link to comment Share on other sites More sharing options...
tylerdurden Posted October 21, 2015 Share Posted October 21, 2015 Isn't investing into this stock now similar to just going to the casino and playing black or red (well it could be 0 or 00 too I guess) at the roulette table? There is no way we can know whether this is fraud or not at this point and personally I can not see how anyone can invest in this circumstances. Investing based on character... I don't know, I guess I'd pass on that as well... Just my quick thoughts... The thing is, if you defend a stock fiercely with hundreds of posts (even a few rage-fuelled caps-locked rants in which you call people 'fucking idiots') you maneuver yourself into a position in which it is extremely hard to change your mind. Your subconscious doesn't want you to look like a fool in public so when new information comes out you have a strong tendency to change your thesis rather than your opinion. I'm not even saying the initial thesis was wrong - just that it has changed from '25% growth into perpetuity' to a 'character judgement' in a few weeks. Textbook example of thesis creep. The reason I invested in VRX in the first place is because I really liked Pearson, his past actions, and the way he responded to various questions during the Allergan take-over attempt. I still believe that 20-25% growth is a good estimate, nothing has changed. At the multiple I was willing to pay, the bet was on the business model and Pearson, that's still the bet. In addition now, we are going to find out for sure if there is fraud or not. It won't take long from here. My judgement is that there probably is not a huge fraud committed by Valeant where Pearson was fully aware of it. I could be wrong, but it comes down to judgment of character because 20-25% growth won't happen if there was major pervasive fraud, obviously. I stated I was doubling down, and posted that that was solely based on my judgement of character of Pearson versus the group attacking him. I wanted to state that so that other posters don't necessarily buy based on my actions or thinking I am basing my decision on anything more than that. To me the 20-25% growth holds on the assumption Pearson is not involved in some major fraud. Pearson might not be involved in the fraud but any person or group of people who had the capacity to create any major fraud can take the company down anyways. We should learn soon as you were pointing out... Link to comment Share on other sites More sharing options...
KCLarkin Posted October 21, 2015 Share Posted October 21, 2015 Isn't investing into this stock now similar to just going to the casino and playing black or red (well it could be 0 or 00 too I guess) at the roulette table? There is no way we can know whether this is fraud or not at this point and personally I can not see how anyone can invest in this circumstances. Investing based on character... I don't know, I guess I'd pass on that as well... Just my quick thoughts... The thing is, if you defend a stock fiercely with hundreds of posts (even a few rage-fuelled caps-locked rants in which you call people 'fucking idiots') you maneuver yourself into a position in which it is extremely hard to change your mind. Your subconscious doesn't want you to look like a fool in public so when new information comes out you have a strong tendency to change your thesis rather than your opinion. I'm not even saying the initial thesis was wrong - just that it has changed from '25% growth into perpetuity' to a 'character judgement' in a few weeks. Textbook example of thesis creep. Speaking of thesis creep... Citron is claiming that VRX is using Philidor to book phantom sales. But there is ample evidence that Philidor is actually being used to: - avoid generic substitutes for Valeant drugs - provide $0 co-pay to encourage consumers to buy expensive drugs - assist with insurance companies - aggressively re-fill prescriptions Why can't these shorts get their story straight? Link to comment Share on other sites More sharing options...
Liberty Posted October 21, 2015 Share Posted October 21, 2015 http://ir.valeant.com/investor-relations/news-releases/news-release-details/2015/Valeant-Pharmaceuticals-Responds-To-Erroneous-Report/default.aspx LAVAL, Quebec, Oct. 21, 2015 /PRNewswire/ -- Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) today responded to recent accusations made regarding its financial reporting and operations. Philidor Rx Services is a pharmacy licensed in Pennsylvania and also provides back-end services, including call center, claims adjudication, IT and logistics support, as well as compliance/HIPPA regulation guidance, to other pharmacies, including R&O Pharmacy. This includes a common call center phone number serviced by Philidor for the Philidor network pharmacies. All shipments to Philidor and other pharmacies in the Philidor pharmacy network, including R&O, are not recorded in Valeant's consolidated net revenue. Sales are recorded only when the product is dispensed to the patient. All sales to Philidor and Philidor network pharmacies are accounted for as intercompany sales and are eliminated in consolidation. They are not included in the consolidated financial results that Valeant reports externally. Any inventory at pharmacies in the Philidor pharmacy network are included in Valeant's consolidated inventory balances – there is no sales benefit from any inventory held at these specialty pharmacies and inventory held at the Philidor network pharmacies is reflected in Valeant's reported inventory levels. The $69 million at wholesaler acquisition cost of products shipped by Valeant to R&O were not recorded as revenue to Valeant when shipped to R&O. When R&O dispensed those products Valeant recognized the net realized amount due from patients and payors (approximately $25 million) and reduced the associated inventory from Valeant's balance sheet. In this case, we estimate the net amount of revenue for the $69 million at WAC would be approximately $25 million. The timing of our revenue recognition by selling through the Philidor pharmacy network is actually delayed when compared to selling through the traditional wholesaler channel. Link to comment Share on other sites More sharing options...
tombgrt Posted October 21, 2015 Share Posted October 21, 2015 Another CoBF battleground stock that just had to tank I guess. Seeing how all those super investors just can't be wrong, I assume the longs are doubling or even tripling their positions. Serious btw, you either suck it up and load up the truck or you can just as well sell now due to low/no conviction. Link to comment Share on other sites More sharing options...
rpadebet Posted October 21, 2015 Share Posted October 21, 2015 http://ir.valeant.com/investor-relations/news-releases/news-release-details/2015/Valeant-Pharmaceuticals-Responds-To-Erroneous-Report/default.aspx LAVAL, Quebec, Oct. 21, 2015 /PRNewswire/ -- Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) today responded to recent accusations made regarding its financial reporting and operations. Philidor Rx Services is a pharmacy licensed in Pennsylvania and also provides back-end services, including call center, claims adjudication, IT and logistics support, as well as compliance/HIPPA regulation guidance, to other pharmacies, including R&O Pharmacy. This includes a common call center phone number serviced by Philidor for the Philidor network pharmacies. All shipments to Philidor and other pharmacies in the Philidor pharmacy network, including R&O, are not recorded in Valeant's consolidated net revenue. Sales are recorded only when the product is dispensed to the patient. All sales to Philidor and Philidor network pharmacies are accounted for as intercompany sales and are eliminated in consolidation. They are not included in the consolidated financial results that Valeant reports externally. Any inventory at pharmacies in the Philidor pharmacy network are included in Valeant's consolidated inventory balances – there is no sales benefit from any inventory held at these specialty pharmacies and inventory held at the Philidor network pharmacies is reflected in Valeant's reported inventory levels. The $69 million at wholesaler acquisition cost of products shipped by Valeant to R&O were not recorded as revenue to Valeant when shipped to R&O. When R&O dispensed those products Valeant recognized the net realized amount due from patients and payors (approximately $25 million) and reduced the associated inventory from Valeant's balance sheet. In this case, we estimate the net amount of revenue for the $69 million at WAC would be approximately $25 million. The timing of our revenue recognition by selling through the Philidor pharmacy network is actually delayed when compared to selling through the traditional wholesaler channel. Still no data on how much is sold through these pharmacies....why? Link to comment Share on other sites More sharing options...
adesigar Posted October 21, 2015 Share Posted October 21, 2015 Interesting at this price Link to comment Share on other sites More sharing options...
Picasso Posted October 21, 2015 Share Posted October 21, 2015 Surprised it took hours to get out that simple response. Link to comment Share on other sites More sharing options...
ourkid8 Posted October 21, 2015 Share Posted October 21, 2015 Don't forget, this type of response needs to be vetted by BOD, Compliance, Legal and IR. It takes time... Surprised it took hours to get out that simple response. Link to comment Share on other sites More sharing options...
luck Posted October 21, 2015 Share Posted October 21, 2015 valeant has been awful with their pr handling of this. ackman tried to defend in the bloomberg interview. i think at some point, the hedge fund groups that are still in this will collectively start addressing the issues presented by the shorts. Link to comment Share on other sites More sharing options...
luck Posted October 21, 2015 Share Posted October 21, 2015 someone pointed out that both citron and hempton had good track records. i was under the impression that john hempton had a less than stellar track record. wondering if anyone knows hempton's performance numbers? Link to comment Share on other sites More sharing options...
cogitator8 Posted October 21, 2015 Share Posted October 21, 2015 I will be watching VRX bonds ! Link to comment Share on other sites More sharing options...
original mungerville Posted October 21, 2015 Share Posted October 21, 2015 I added again - so more than doubled my position now. Again could be wrong here. Link to comment Share on other sites More sharing options...
Picasso Posted October 21, 2015 Share Posted October 21, 2015 The bonds are restricted to QIB's last I looked. Retail investors can't really buy them directly. Every bond was issued under 144A unless there was one I missed. Link to comment Share on other sites More sharing options...
cogitator8 Posted October 21, 2015 Share Posted October 21, 2015 VRX has flawed business model, I never owned this stock for this reason. Since I am a physician, I know first hand how much price gouging is going on. They are charging awful lot of money for simple metformin, by trying to sell a long acting version Glumetza. They have $30 B of debt and it will be interesting to see the damage done. Link to comment Share on other sites More sharing options...
luck Posted October 21, 2015 Share Posted October 21, 2015 jeff ubben is on the board of valeant - not sure who else. other folks will now try to get on the board i'd imagine. if there is fraud in the company, i would imagine the past will not equal the future. also, i doubt pearson himself is clearly aware of any fraud. he comes across as anything but a trickster in his various interviews. Link to comment Share on other sites More sharing options...
cogitator8 Posted October 21, 2015 Share Posted October 21, 2015 Almost all my colleagues owned this stock and I argued with them about the business model. So I saved my money by not doing stupid things ( As Munger suggested ). To me that advice has been profound, so I will restate it here" Avoid Stupidity". Link to comment Share on other sites More sharing options...
thefatbaboon Posted October 21, 2015 Share Posted October 21, 2015 Never owned Valeant because I find reading about drug companies boring and slightly nauseating - like visiting the doctor. But I find it unlikely all these very good investors have been defrauded so purely on that basis I shorted some 2018 at the money puts today and got paid about 40% of the notional. Link to comment Share on other sites More sharing options...
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