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Citron's Andrew Left: Valeant Was Able To 'Game The System,' Now It's 'A Sinking Ship'

Citron's Andrew Left: Valeant Was Able To 'Game The System,' Now It's 'A Sinking Ship'

Andrew Left and his research firm, Citron Research, are known for short selling overvalued or over-hyped companies.

Left led the bearish case against Valeant Pharmaceuticals Intl Inc (NYSE: VRX) and even referred to the company as the "Enron" of the pharmaceutical industry back in October 2015.

Fast forward to May of this year and Left switched positions and became bullish on Valeant's stock, but in the form of out-of-the-money puts. He cited an expected "bounce" in Valeant's stock after a decline of nearly 90 percent over the past year.

On Wednesday, in an interview with The Street's Real Money, Left said he is once again short Valeant's stock. He said the stock should be worth an "obvious" zero, especially after the firm's second largest investor, Sequoia Fund, confirmed it will sell its stake in the troubled drugmaker.

Left noted that as a major investor in Valeant, Sequoi likely had greater access to vital information and data than the public has.

"They've sat down and they've seen and they've interviewed and they walked," Left told Real Money. "The fact there they're selling tells everything."

Valeant Was Able To 'Game The System,' Now It's 'A Sinking Ship'

Left told Real Money Valeant was able to "game the system" for a while by abusing the medical industry. Specifically, the company was active in "price gouging" on some of its drugs and even admitted to $58 million of improperly booked sales tied to Philidor.

He added that Valeant's business is "already a sinking ship" - but now "a sinking ship" with $31 billion in debt that it raked up while overpaying for acquisitions.

Bottom line, Left said, "With the Titanic going down you can at least get on a life boat and get out with what you can."

Shares of Valeant were trading lower by more than 3 percent at $22.48 Wednesday afternoon after trading as high as $24.67 earlier in the trading session.


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