VRX: heads up, earnings PRE open June 7

S

ScalperJoe

Anyone trading this turd for earnings?

It's down 90% from the top and trading in a sideways consolidation phase from the last report.

I bought some bull call spreads, not a lot on the table. I won't touch the common, it's toxic, lol!

I don't watch CNBC, and I don't follow any analysts, because nobody can predict the opening print of tomorrow's candle. Earnings are 50/50 random shots. Anyone claiming otherwise is probably trying to sell you something.

Ackman's fund is down around $1 BILLION on the thing. He's now on the board so maybe there's a positive spin.

Best of luck to those placing bets.

SJ
 
ScalperJoe said:
Anyone trading this turd for earnings?

It's down 90% from the top and trading in a sideways consolidation phase from the last report.

I bought some bull call spreads, not a lot on the table. I won't touch the common, it's toxic, lol!

I don't watch CNBC, and I don't follow any analysts, because nobody can predict the opening print of tomorrow's candle. Earnings are 50/50 random shots. Anyone claiming otherwise is probably trying to sell you something.

Ackman's fund is down around $1 BILLION on the thing. He's now on the board so maybe there's a positive spin.

Best of luck to those placing bets.

SJ
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Did a small 3-2 strip straddle
 
FreakofNature said:
50/50 is acceptable, what matters is fixed risk and appropriate reward.
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Exactly. And it looks like turds will be turds. VRX gapping down 19%. Bill Ackman's "thesis" is WRONG, and so was mine. Fortunately I had fixed risk, and the call spread will expire worthless. It was a maximum 1 by 4 RR with any positive news and a favorable gap.

The $30 billion in Valeant's debt is killing them.

Looks like Ackman better start figuring out how he's going to trade out of this jam, lol!

At a cost basis of $196 a share, I hope he's hedged to minimize the $1 BILLION+ damage to his fund.
 
To Ackman's credit, at least in his letter to shareholders he admits it was a "costly mistake."

From Pershing's letter to shareholders, dated January 16, 2016, excerpt below:

"When we purchased Valeant at an average price of $196, we bought the company at a modest discount to intrinsic value as represented by the company’s existing portfolio of products and businesses, but at a very substantial discount to fair value in light of its acquisition track record,the large number of potential targets, and its competitive advantages which include its low-cost operating model and favorable tax structure. When the stock price rose this summer to the mid-$200s per share, we did not sell as we believed it was probable the company would likely complete additional transactions that would meaningfully increase intrinsic value. In retrospect, this was a very costly mistake."

From Pershing's most recently filed letter, dated May 11, 2016: a few of the comical statements regarding the desire to hold the position:

"We have made material progress at Valeant since our last communication."

"It will take time for Valeant to regain its stakeholders’ trust."

Yes, Bill, with the stock now tanking another 21%, it certainly will.

It's ok to be wrong, but it's not ok to stay wrong, especially when you're trading OPM.
 
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