This is a company that many of you probably have never heard of before, but if you follow the financial news, Valeant Pharmaceuticals was a big name recently.
On Mar. 14, Valeant was trading at $69.04 but by Mar. 18, was down to trading at $26.98. This dramatic change is something we typically do not see in the marketplace, and since Valeant’s beta was at .15, it was even more shocking.
With such a low beta, they typically do not move very much on an average day trading; however, there was big news which broke that sent them plummeting.
Valeant has failed to file its annual results, and this signaled to the market that it could be defaulting. So people went running away from the stock, and it dropped by more than half of its market shares.
It is now currently looking for a new CEO. It has hope for the future, but the damage has already been done.
One simple act of not filing the annual reports, whether intentional or not, has cost them and their stockholders billions of dollars. The important lesson to take away from this is that the actions of a few people in a company can have shockwaves that affect people and institutions throughout the world.
For Valeant, the future might be able to turn around, but until then, they have some serious making up to do.
