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The Morning Brief: Valeant’s Stock Back in the Black for the Year

The troubled drug maker has enjoyed a big boost since Paulson & Co. founder John Paulson joined the board.

  • By Stephen Taub

Valeant Pharmaceuticals International is back in the black…at least for the calendar year. The embattled stock that made many high-profile hedge funds poorer is now up about 18 percent over the past three sessions alone since it was announced that has-been hedge fund manager John Paulson — the company’s largest shareholder — is joining the board of directors. Apparently investors think this will be a good thing. Drug stocks in general also did well Thursday because investors think the Senate health care bill will be good for the pharmaceutical companies. Valeant has enjoyed sharp rallies several times this year only to fall back on some sort of bad news. Investors are also applauding the company’s move to sell assets to pare its considerable debt.

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Soroban Capital Partners disclosed that as of June 12 it had established a stake of more than 30 million shares in MGM Resorts International, or 5.3 percent of the hotel and gaming company. It did not own any shares of the company as of the end of the first quarter, according to regulatory filings. The disclosure was made in a 13G filing suggesting the investment is passive.

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Mudrick Capital Management more than doubled its stake in Verso Corp. to more than 5.2 million shares, or 15.36 percent of the paper maker. At year-end it held 2.1 million shares.

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The SS&C GlobeOp Forward Redemption Indicator rose in June to 3.59 percent from 3.08 percent the previous month. However, this is down from 4.88 percent reported in June 2016. “This marks the fifth consecutive month of lower year-over-year redemptions, a very positive trend for the hedge fund industry,” says Bill Stone, chairman and chief executive officer of SS&C Technologies, in a press release.

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