William Ackman, the owner of Pershing Square Capital Management, has sold his stakes in Valeant Pharmaceuticals International Inc. Ackman sold 18.1 million shares of the drugmaker company, which is the equivalent of $221 million.
He said that Pershing Square would stay at the company until this year’s meeting, but wouldn’t stay more time for a re-election. Ackman sold his shares when they were trading at $12.11 on the New York Stock Exchange in 2015, and he bought his shares when they were trading at $190.
“At its current market value, the Valeant position represented 1.5% to 3% of the various Pershing Square funds; however, the investment required a disproportionately large amount of time and resources,” said the firm, according to CNBC.
According to CNBC, Ackman sold all his stake because “it wouldn’t move the needle for Pershing Square, even if the stock doubled from here.”
In 2015, an investigation showed that Valeant was using a network between the drug maker and a web drugstore to sell their high-cost drugs instead of the generic or cheaper ones.
Also, in March 2016 they said that they paid $1.1 billion in loans after selling its resources of skincare products to L’Oreal, but the company still have a $28 billion debt.
Ackman has experienced loss after Valeant. In 2013 he quit from J.C. Penney Co.’ board of directors, after a public discussion about the leading of the minors. Also, he invested in Target in 2007, but he lost 90% of his investment after two years, in 2009.
According to Bloomberg, Valeant’s investment has been one of the worst decisions of Ackman, losing nearly $4 million.
Ackman vs. Herbalife
Since 2012 to 2015 Ackman fought against Herbalife for using, according to Ackman, a “pyramid scheme,” affecting the vulnerable population, especially in Latin America.
After a long lawsuit, in 2015 the court said that Ackman would pay $200 million to Herbalife for committing some company’s processes, affecting its reputation. In that opportunity, the court concluded that Herbalife didn’t have a pyramid scheme.
“The Federal Trade Commission ratification shows that our business model is strong,” said Michael O. Johnson, Herbalife’s CEO.
William “Bill” Ackman studied at Harvard where he obtained a bachelor of arts degree in history. Also, he received in 1992 an MBA degree from the same college. He is considered a contrarian investor.
He founded Pershing Square Capital Management in 2004, with a capital of $54 million. He is also known for his stakes in Chipotle Mexican Grill, an American chain of Mexican restaurants in many countries as the U.S., Germany, and France.
Ackman bought eight stocks of Chipotle Mexican Grill recently, in February, with a value of $5.9 billion, according to Gurufocus.