Valeant CEO sends memo to staff assuring them the company isn't on the verge of bankruptcy
Valeant CEO Mike Pearson sent a memo to company staff on Wednesday assuring them, among other things, that the company's isn't on the verge of filing for bankruptcy, according to a report from Bloomberg News.
Bloomberg's Cynthia Koons reported late Thursday that Pearson sent a memo on Wednesday seeking to reassure employees after what has been a truly horrendous week for the company.
On Tuesday shares of the Canadian pharmaceutical company fell 51% after the company gave an earnings and revenue outlook that was far worse than expected by analysts.
The company also said it would miss a deadline to file its annual report with the SEC and added that it risked falling into default on some its debt obligations if this report isn't filed within 60 days of March 15, 2016.
Pearson addressed employee concerns about the company filing for bankruptcy in the memo, writing, "I can assure you we are not," according to Koons.
In the last year shares of the company are down about 85%.
Valeant has been under the microscope over the last several months as its strategy of buying-up smaller rivals and raising prices on their drugs has come under scrutiny from politicians including Democratic presidential frontrunner Hillary Clinton.
Additionally, the company was a popular name among a number of high-profile hedge fund investors, the most notable of which is Bill Ackman of Pershing Square.
On Tuesday, Business Insider's Julia LaRoche calculated that Ackman lost approximately $1 billion on his stake in the company bringing his estimated losses on the stock to around $2 billion.
Tuesday's plunge in Valeant's stock price prompted Ackman to send a letter to his investors reassuring them of the company's prospects, writing, in part:
We are going to take a much more proactive role at [Valeant] to protect and maximize the value of our investment. We continue to believe that the value of the underlying business franchises that comprise Valeant are worth multiples of the current market price.
Ackman added that concern over Valeant's potential for default "creates enormous investor fear."
On Thursday shares of the company fell 11.5% to close at $29.67, their lowest level since December 2010.
Read the full report at Bloomberg here »