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Even Pharma Bro Martin Shkreli Wouldn’t Touch Valeant

MSMB Capital Management CIO Martin ShkreliMSMB Capital Management CIO Martin Shkreli
Martin Shkreli is the CEO of Turing Pharmaceuticals, which faced flack this year over its 5,000% price increase for older life-saving treatment Daraprim.Photograph by Paul Taggart — Bloomberg via Getty Images

Vilified former biotech executive Martin Shkreli took to YouTube on Tuesday to analyze Valeant Pharmaceuticals (VRX), the troubled pharmaceutical giant whose stock has cratered over 50% today on a messy earnings report. It was also Shkreli’s alleged drug price-gouging practices back in September that helped bring attention to Valeant’s own.

His analysis: Sell.

Shkreli, who hasn’t traded Valeant stock since he closed out of his long-position late October with a 3% loss, concluded in the live stream “investing class” that Valeant’s stock price seems fairly valued, and likely not a great investment. He states that the company’s dermatology brands are “smoke and mirrors,” with products that were non-medicinal.

That was after Valeant stock price dropped 50% to $33.51 on Tuesday, following an earnings report that missed analyst estimates and included an eyebrow-raising $600 million typo.

The former CEO of Turing Pharmaceuticals, Shkreli, is also predicting a management shakeup for Valeant.

“The terminal value is determined by management confidence. I don’t think Mike will eventually survive this—even through this week,” said the one-time hedge funder. “They’ll probably vote him out today, just knowing how boards work.”

 

Shkreli also noted that it probably wasn’t a great decision on the management’s part to buy “female viagra” maker, Sprout, or dole out so many stock options to employees, both of which have hurt earnings.

“That would’ve been a nice billion dollars to have handy,” he said, referring to how much those two items impacted Valeant’s bottom line.

Shkreli, who is known for his odd live chats, concluded the session by playing chess, hip hop, and “reading court cases for fun.” Of course, you might not want to take investing advice from Shkreli. The 32-year-old is currently facing securities fraud charges from the federal government stemming from his time as a hedge fund manager.