Controversial biotech CEO Martin Shkreli just lost money on his 'bad idea' Valeant bet

Former hedge fund manager and controversial biotech CEO Martin Shkreli has ditched his money-losing long position in Canadian pharmaceutical company Valeant just three days after boasting about it on Twitter.

“Exited the Allergan/Valeant trade. 3% loss or so. Bad idea. Onward and upward,” Shkreli Tweeted on Monday.

Last Wednesday, Valeant’s stock tanked after short-selling-firm Citron Research published a report asking if it was operating an Enron-like fraud.

That same day, Shkreli posted on Twitter that he was long Valeant and short Allergan.

“I have taken a long position in [Valeant] and shorted [Allergan] as a hedge. Both companies have similar prospects and one is at half the price,” Shkreli Tweeted.

Valeant has said that they “categorically deny the allegations made in the Citron Report.”

The company hosted an all-hands call on Monday morning to address the allegations. The stock was last trading down 3.3% at around $US112.27 per share.

The stock is down about 23% since the Citron report came out.

Meanwhile, Allergan’s stock has risen about 2.7% since last Wednesday.

Shkreli is the founder of Turing Pharmaceuticals, a biotech startup. He quickly became a household name last month after his company purchased the rights to a 62-year-old antiparasitic drug and then jacked up the price by more than 5,000%.

Valeant has also been criticised for its drug pricing. The company has also been compared to Shkreli. 

In late September, Democrats on the House Oversight and Government Reform Committee sent a letter to the committee’s chairman, Jason Chaffetz (R-UT), asking him to subpoena Valeant for documents related to price increases of acquired drugs.

The letter said that Valeant “is using precisely the same business model as Martin Shkreli, the 32-year-old former hedge fund manager whose company recently purchased the life-saving drug Daraprim and increased the price from $US13.50 to $US750 per pill ‘overnight.'”

 

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