Is Valeant the Next Enron?

by David Kranzler
Investment Research Dynamics

Earlier this year in March Valeant stock plunged in one day from $70 to $36. I had not paid much attention to the VRX Saga until then. When I examined the financials I was quite aghast with what looked to be the potential for another Enron – LINK. The financials are riddled with multiple accounting improprieties, if not outright fraud. The balance sheet sports over $31 billion in debt against just $9 billion in tangible assets. It’s tangible net worth is negative $32.6 billion.

I stopped following the Valeant Saga once Bill Ackman made a lot of noise announcing a new CEO and board. I figured the stock would bob and weave before and after every press release Ackman crafted to generate interest in the stock. Early April was my last commentary on the stock, although I’ve considered featuring it my Short Seller’s Journal as a great short idea.

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