It’s not uncommon for fund managers to hold small dinners to meet with investors and discuss their investment bets. But for a board member of a company to attend one during that company’s quiet period? That’s a recent Valeant move that’s raising some eyebrows.
In late June, Valeant director Bill Ackman attended a Bank of America event--billed as “Valeant: a Bull/Bear dinner”--in New York City, sources tell Reuters. There, close to two dozen mutual and hedge fund managers put their heads together on how to turn the company around.
While Ackman attended largely in “listen-only mode,” as one source told the news service, the move--and its proximity to Valeant’s Q2 earnings announcement--drew some fire from critics, especially in light of the company’s pledge to clean up its business practices and improve transparency.
“Are things really changing, or is it just new paint on the same old shed?” Wells Fargo analyst David Maris asked Valeant CEO Joseph Papa on the company’s quarterly conference call, noting that the dinner seemed like a symptom of “the same old Valeant.”
Papa, who said he didn’t know specifics, declined to comment on the event, but since he took up the reins in April, he’s been promising shareholders honest and responsible conduct from the troubled drugmaker. Valeant has earned its fair share of negative headlines since last summer, and channel-stuffing allegations and price-gouging accusations have taken a major toll on the pharma’s share price as of late.
Meanwhile, though, it seems as though the company has taken concerns raised at the dinner to heart. In that discussion, investors flagged changes such as replacing longtime investor and public relations head Laurie Little and urging Papa to do a better job communicating than predecessor J. Michael Pearson. Valeant announced Little’s departure earlier this week, and on Tuesday’s conference call, Papa noted that he’d be extending the Q&A “to try to be as transparent as possible.”
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