If you haven't been following the financial news this morning, Bill Ackman of Pershing Square finally sold his firm's rather large stake in Valeant Pharmaceuticals.
Why is that big news?
Well, they/he had previously amassed a massive stake with a cost average around $196 per share over the course of the past couple years. That wouldn't be such a bad thing if Valeant wasn't trading near $10 per share currently.
In a filing that came out after the market closed yesterday it was revealed that Ackman had sold out the last of his position with a cost average of $11 per share. That represents roughly a 94% loss on investment. That is staggering, but the dollar amount is what is really mind blowing here though...
Bill Ackman and Pershing Square lost roughly $4 billion dollars on their Valeant Pharmaceuticals position. Making it one of the largest trading losses of all time. There have only been a handful of larger losses by individual people or firms, ever.
Bill Ackman and Pershing Square say the massive loss will come in handy the rest of the year to offset gains for tax purposes and allow them to focus their energy more on existing investments. Both of which are probably true statements. However, only in America can a person spin a $4 billion dollar loss (of other people's money) into a good thing.
Ackman has faced heat in the past several years because of his "wrong" bet in J.C. Penney, his short position in Herbalife that went the wrong direction, and now his massive loss in Valeant. Surprisingly for him, most of his investors don't seem to be losing confidence in him, yet.
Let's hope Steem doesn't ever become one of the largest losses ever for anyone! :)
Sources:
https://www.forbes.com/sites/nathanvardi/2017/03/13/billionaire-bill-ackman-sells-disastrous-valeant-investment-after-nearly-4-billion-loss/#7c909df74b24
Image Sources:
https://www.forbes.com/sites/antoinegara/2016/08/03/by-selling-canadian-pacific-bill-ackman-is-planning-to-invest-again/#12f878681838
http://www.nasdaq.com/article/the-lesson-from-bill-ackmans-valeant-vrx-woes-cm760518
