Andrew Left of Citron Research, the short seller whose October report sent Valeant Pharmaceuticals tumbling and sparked an SEC investigation into the company, says he’s not shorting the stock.
Not because he thinks Valeant’s problems are over, but because the company is “uninvestable.”
On Wednesday afternoon he told CNBC’s Scott Walker that he would allow regulators and the company to fight out their issues, and that he had moved on to “find a different story to expose” in the stock market.
Left wrote a bunch of reports about Valeant last fall, and accused the company of being a pharmaceutical Enron for allegedly creating shady entities where it could hide financial problems. Since then, it has been brought to light that Valeant was using a secret specialty pharmacy called Philidor to distribute its products.
Valeant went after Left for his reports and asked the SEC to investigate. “Valeant tried to put the blame on me,” he said.
But when the SEC approached Left, he gave them what he had on Valeant. Now the SEC is investigating Valeant instead.
In the CNBC interview, Left framed that as his patriotic duty. He also said that he hoped the SEC investigation didn’t just focus on Valeant’s incredibly close relationship with Philidor — which he wrote about in his third report on the company — but rather on Valeant’s practice of acquiring drugs through M&A deals and then jacking up their prices.
He wrote about that issue, which has drawn the attention of Congress and presidential candidate Hillary Clinton, in his second report on the company.
At the end of the interview host Scott Walker read a statement from Valeant’s most vocal supporter in hedge fund land, Bill Ackman of Pershing Square. Ackman said that he expected Valeant’s problems to clear up in a few weeks, and that then things would go back to business as usual again.
But since when does the SEC pack it up in a few weeks?