I agree. This report seems pretty damning. And if Citron is wrong, they have massive legal exposure. So they have a very strong incentive to be correct.

They have been wrong before. They write things up in a way to protect themselves from legal ramifications.

(Also, if you are going to go with Citron is more likely to be right because of legal repercussions, then you should also think that VRX isn't likely to have engaged in wrongdoing for the same reason)

Ackman only added like 10% to his position, so it's not really that much. And imo a lot of the Citron reports aren't stating things as facts, or really accusing companies. More like pointing out things that are shady and asking the analysts or the company to explain inconsistencies to the shareholders.

Don't frown, average down!

I lost a smaller percent than Packman today, so there is that.

The report seems pretty simple and clear, but it doesn't mean the whole thing is a house of cards. It could be some shady practices that are limited to to this one bill they sent.

If it is only that single bill then it's still not good and is potentially anywhere from 0-100% fake revenue and skewed to 100% but could be isolated.

Will be interesting to see, personally I think the Citron report seems very plausible.

I can assure you that it isn't completely impossible to read their response to the accusations.

That is certainly true. However, I think there is a distinction in that the people at VRX might have been operating under the assumption that any improprieties would never see the light of day. Whereas Citron had to have known they were making some very explosive allegations that would attract a lot of publicity.

You are trying too hard to maintain a narrative. Citron had absolutely nothing to worry about on this legally on any known universe. Nothing they wrote could possibly be actionable in court.

This whole thing reeks. I have worked in public accounting and been involved with auditing revenue for publicly traded companies pre-earnings release. I can assure you that if VRX intended to inflate its revenue in the manner that is alleged, it is 99% certain that the auditors would never have found out about it.

And even if they did just cheat on their revenue a little bit at the margins (which I think is the most likely case), that is still fraud. Their CEO will go to jail, they will have to restate several years worth of earnings and do a massive forensic investigation, and the value of the stock will go into the toilet. So in short, I wouldn't be long here, but to each his own.

You haven't read their response. You should.

Valeant Pharmaceuticals International, Inc. today responded to recent accusations made regarding its financial reporting and operations.

– Philidor Rx Services is a pharmacy licensed in Pennsylvania and also provides back-end services, including call center, claims adjudication, IT and logistics support, as well as compliance/HIPPA regulation guidance, to other pharmacies, including R&O Pharmacy. This includes a common call center phone number serviced by Philidor for the Philidor network pharmacies.

– All shipments to Philidor and other pharmacies in the Philidor pharmacy network, including R&O, are not recorded in Valeant’s consolidated net revenue. Sales are recorded only when the product is dispensed to the patient. All sales to Philidor and Philidor network pharmacies are accounted for as intercompany sales and are eliminated in consolidation. They are not included in the consolidated financial results that Valeant reports externally.

– Any inventory at pharmacies in the Philidor pharmacy network are included in Valeant’s consolidated inventory balances — there is no sales benefit from any inventory held at these specialty pharmacies and inventory held at the Philidor network pharmacies is reflected in Valeant’s reported inventory levels.

– The $69 million at wholesaler acquisition cost of products shipped by Valeant to R&O were not recorded as revenue to Valeant when shipped to R&O. When R&O dispensed those products Valeant recognized the net realized amount due from patients and payors (approximately $25 million) and reduced the associated inventory from Valeant’s balance sheet. In this case, we estimate the net amount of revenue for the $69 million at WAC would be approximately $25 million.

– The timing of our revenue recognition by selling through the Philidor pharmacy network is actually delayed when compared to selling through the traditional wholesaler channel.

* * *

“We categorically deny the allegations made in the Citron Report. Citron’s false and misleading statements about Valeant appear to be an attempt to manipulate the market in an effort to drive down Valeant’s stock price. As disclosed in our third quarter earnings presentation and further today, Valeant has a contractual relationship with Philidor and properly accounts for sales to, and inventory at, Philidor and Philidor’s network pharmacies. We are confident in our full compliance with all applicable accounting rules, regulations and laws.”

Yea Citron being legally responsible to pay damages for what they said is beyond lol.

I'll read the response.

Response solid, probably nothing to see here. Why is R&O disputing the charge? Is that public?

Hey dickhead, where did I say that Citron would be legally responsible to pay damages? Are lawyers free now? Do big pocket people not sue small time operators all the time as a means of legal intimidation? Amazon is suing people who sold fake reviews on Fiverr. You really think they're going to win?

BFI, crazy person. Crazy person, BFI.

Now that introductions are in the rear view, talk amongst yourselves.

lol. I have better things to do than to argue with random people on the internet. I'm sure all of you do too. My basic point was that I don't think there is zero probability of Citron getting sued and/or investigated by the SEC over this. The wording of my original post was clumsy.

With respect to their response, I agree it was a good response. I think there are still unanswered questions, particularly with respect to R&O disputing the charge and filing a lawsuit, and to there being multiple versions of the end distributor's website. But we'll see what happens.

TWTR re-opening APIs to developers is something to watch for.

Even if you hate CRM, you have to respect that they are spawning billion dollar companies who use them as a platform.

Twitter going back to being a developer-friendly platform could have very large implications.

yeah I was super comfortable with the response and doubled down on VRX with the CDN version. Hoping for a kind open tomorrow.

Amazon and Google earnings today might be interesting or rather Alphabet lol. GOOGL has ton of resistance at 700 both could fade easily.

That's a better earnings calendar than I get from the broker I pay commissions to.

That's awesome RLYP premarket goes $20 to $10. new all-time low below IPO. Darn CAT was a gift. jeez misses top and bottom who'd a thought. I'm still stalking CAT for short.

Guess I'm averaging down VRX today. Gonna wait a bit here though.

What's the plan here man? Curious why the couple of you went long into the tape today.

You have zero edge there man. Be careful.

yeah in this instance I can't say I'm trading it. Probably more suited for the buy/hold thread. I've got what's a 1/2 position for me. I've done this before where I felt the fuss was probably somewhat unwarranted. It's worked before with guys like RJET and other distressed stocks, and failed on some too. Admittedly I don't use any TA for this sort of situation, and I do understand that it's a dangerous game. I'll know in a few months if it was a bad call or not. Certainly not suggesting that anyone else follow my lead. I also don't think I'll even average down today, I was expecting 99-100 to break pretty hard there for a second, and so far it's held. Not entirely sure what I average out too across the TSX and NYSE, probably something like 110 given the exchange rate. I'm used to much worse swings than that in bio, so helps keep me from stupid panic moves.

Fwiw doing super on CGC.V, the big Canadian weed grower. Bought it the morning the liberals won the election here in Canada. Beasting since, so feeling less pain.