Ackman's Pershing Square Lightens Valeant Position For Tax Loss Purposes

Dec 15 2016 | 12:09am ET

Bill Ackman’s Pershing Square Capital Management has trimmed its stake in embattled Canadian drug company Valeant Pharmaceuticals from 9% to 7.8% in order to harvest losses for tax purposes.

The 3.5-million share sale, which came primarily from the hedge fund manager’s onshore Pershing Square accounts, were revealed in a securities filing on December 12, the same day Valeant announced the departures of three senior executives. 

Realizing losses this time of year is a common tactic for investors seeking to offset gains elsewhere in the portfolio and does not imply Ackman has undergone a change of heart regarding Valeant, which has plummeted 84% over the past year on pricing and accounting concerns, and is by far his worst performing position. 

Pershing’s Valeant position has $2 billion in value so far this year, according to the Wall Street Journal. Despite management changes, plans to sell assets to reduce debt and the involvement of Ackman on the board, Valeant remains near its lows and closed Wednesday at $14.78, slightly below the $14.85 per share Pershing averaged from the sale. 

After the transaction, Pershing’s filing shows the firm owns more than 27 million shares of Valeant, including those represented by call options, and remains its largest shareholder.


In Depth

Q&A: Portfolio Advisors' Brian Murphy On The Advantages of A Private Markets Platform

Jan 2 2018 | 11:05am ET

Most private markets firms reference their platforms as a source of competitive...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Steinbrugge: The Top Hedge Fund Industry Trends for 2018

Jan 2 2018 | 12:22pm ET

Each year, Don Steinbrugge’s Agecroft Partners compiles the insights gained...

 

FINalternatives Trending

From the current issue of