Shares of Valeant Pharmaceuticals International Inc. were hit hard on Tuesday trading as it dramatically cruised to its near eight-year low after its largest shareholder, Bill Ackman, decided to leave the struggling drug maker firm.
Valeant shares lost a whopping 11% to close at $10.82 share price, its lowest settlement since May 2009 during the financial crisis, with its bonds also slipping into its lowest point since December. The firm’s stock is now down 90% in the stock market since it reached its highest peak in August 2015.
The huge loss incurred on Tuesday was driven by the unprecedented exit by the billionaire hedge fund manager Ackman who sold his remaining stock in the firm amounting to 27.2 million shares at around $11 each, following his decision to leave the board.
David Maris, an analyst from Wells Fargo & Co, provided a not to their clients and gave his sentiment t about the future of the Valeant shares, saying “Now with its largest shareholder and one of its most-vocal supporters selling its stake near the low for the past 10 years, we see this as a vote of no confidence for the stock and that things are continuing to go from bad to worse for Valeant.”
Ackman first bought the stock of Valeant in 2015 at an average cost of $196 share price. The move by the activist investors to sell his stock would cause Ackman to lose about $2.8 billion in his hedge funds.