Shares of the drugmaker Valeant Pharmaceuticals (VRX) have tumbled -18% today after it was reported that the company is under investigation by the U.S. Securities and Exchange Commission. Our Healthcare analysts Tom Tobin and Andrew Freedman have long warned about Valeant's unsustainable business model was supported by an acquisition spree that aggressively valued those assets:
“Valeant is operating what we believe is an unsustainable business model of serial acquisitions and underinvestment, fueled by debt, that will continue to lead to deterioration in the ongoing business.” (Hedgeye, 7/2014)
Below we have unlocked our Healthcare team's original research along with a few updates and the most recent research laying out why VRX shares are only worth $20:
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"VRX | Bear Case $20 | Redemption Cycle" (11/5/2015)
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"The Valeant Implosion Part 1" (11/15/2015)
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Original Valeant Pharmaceuticals "Black Book," (7/2014)
Below is a smattering of Freedman's follow up via Twitter:
