After a huge loss last month in Valeant Pharmaceuticals, Bill Ackman insisted to stay with the company. This time he scored nearly $170 million in one day, showing his capability as a remarkable hedge fund manager. Valeant Pharmaceuticals stock skyrocketed in two days to reach the best gain in 20 years.
Valeant Pharmaceutical's stocks started the rally on Tuesday as it soared 10% after finishing review on accounting and revenue from Philidor RX Services. The reviews showed no problem on its accounting and no further restatement is needed. On Wedneday, the stock jumped more by 18.9%.
After the Wednesday's closing, the shares surge off 30.9% in two days made the best two-day rally within 20 years. The last time its shares jumped that high in two days stretch was on July 17, 1996 with 31.1%. According to Bill Ackman in a conference call on Wednesday, as quoted by Market Watch, Valeant's stock has a "remarkably low valuation for a business of this quality."
Prior to the price surge of Valeant, Bill Ackman had a heavy loss in mid-March, as the company's stock plunged and closed down 51% low. His loss in a single day was a staggering $35.50 off each share. Ackman and his hedge fund, Pershing Square Capital Management, owned a 30.7 million of Valeant shares, making him the second largest shareholders of the company.
The historic surge made Pershing Square Capital value increase $247.5 million in two days, after a $1 billion loss last month. However, Valeant stock still tumbled 66% year to date and even lower on its record high in August 2015 at $262.52.
There are still many ways to go to return investors' confidence as the company must improve its accounting and corporate governance. Bloomberg reported that Bill Ackman in an investor conference call on Wednesday said that he is in search for new CEO for Valeant to improve its management.
Ackman said, "We're cautiously optimistic it's a matter of weeks and not months in terms of identifying new management for the company." He further added, "There is not a list for 100 candidates for the job, there's probably a handful of top candidates. Because of all the M& activity in pharma, there are lots of candidates who are available and there are also people in other businesses that find this opportunity extremely attractive."
Ackman's move showed his capability as a hedge fund manager. As CNBC reported that Pershing Square Capital Management blocked off one hour on Wednesday morning for Ackman and his analysts to walk investors through exactly how one of his fund had a 25% lost in the first three months of 2016. He also explained investors on his bets on Platform Specialty Products, Herbalife and Valeant. The walkthrough is enough to increase investors' confidence on Pershing Square Capital.
Bill Ackman comment on Valeant showed his capability as hedge fund manager. His bullish comment has helped Valeant shares to surge 30.9% in two days rally.
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