By Tim Knight
Bill Ackman had a famously bad time with Valeant Pharmaceuticals, which crashed from $263 to the single digits. Last March, having suffered terrible losses for his fund, Ackman “threw in the towel” and dumped his position, prompting even Gartman to chime in.
So did the stock instantly soar higher? No, that would be a little too neat, wouldn’t it? The stock did indeed keep falling for a few more weeks, losing another 20% or so of its value, making Ackman look like he at least salvaged something out of the mess. However, it soon found support on a trendline that I had pointed out went back nearly two decades………
Looking more closely, you can see how the “towel throw” timing related to the ultimate bottom.
In sum, the stock is up about 60% from where the Ackman capitulation took place, showing that even billionaires can make really regrettable decisions.
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