Valeant: A Clear Sell
- Valeant just got hit with a RICO lawsuit claiming $80bn in damages.
- The lawsuit may or may not have merit, but just the fear of losing may topple the stock.
- Whoever wins the lawsuit is immaterial; retail investors are sure to lose.
By S. Mitra, MBA (ISB)
In an earlier article from late July, I discussed how Valeant Pharmaceuticals (VRX) may be a good trading opportunity for short-term investors or traders based on the then upcoming FDA decision on its glaucoma drug latanoprost. That statement was true for a very short time around August 7, right before the FDA issued the company yet another CRL, yet again related to CGMP issues at its Tampa plant. The stock saw a 5 percentage point rise just before the announcement and then a sharp fall back to the <$15 zone. However, the stock didn't get destroyed after the CRL, which would have been the case with any other normal company receiving a CRL. But Valeant is not a normal company.
The full post is available to investor members only. Subscribe here.