William Ackman Sells Pershing Fund’s Stake in Valeant By MATTHEW GOLDSTEINMARCH 13, 2017
...When other hedge funds began to leave Valeant in 2015 as questions about its practices for pricing drugs and its accounting procedures mounted, Mr. Ackman bravely — some might say stubbornly — stood his ground.
To defend his big bet on Valeant, he held a marathon conference call with investors and reporters in October 2015. He then effectively doubled down by adding shares and taking two board seats with the company — including one for himself. Last year, he sought to mollify angry senators at a hearing on Valeant’s pricing.
But none of that was enough to stop the bleeding for a stock that had plunged from a high of $257 in the summer of 2015. While the stock market has surged since the presidential election in November, Valeant shares have continued to sag, closing at $12.11 on Monday.
So Mr. Ackman threw in the towel and announced that his firm, Pershing Square Capital Management, was dumping one of its worst investments ever: a two-year bet that lost about $4 billion for his investors.
...In addition to Pershing Square’s troubles with Valeant, it has been punished by the performance of Herbalife, the nutritional food supplement company that Mr. Ackman has said is an illegal pyramid scheme and will ultimately collapse.
...As of March 7, Pershing Square Holdings, a publicly traded portfolio that mirrors the main hedge fund, was down 1.5 percent for the year. Last year, the portfolio was down 13.5 percent, and in 2015, the portfolio was down 20.5 percent.
Over all, Mr. Ackman’s hedge fund firm has had more success than failure, registering nine winning years since it began in 2004.
The move by Mr. Ackman to part ways with Valeant has similarities with Pershing Square’s big investment in J. C. Penney, where he also had a board seat. Mr. Ackman made a huge bet on a turnaround strategy at J. C. Penney only to see it fail miserably, selling his stake in the company in 2013.
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