From an intraday high of $97.64, Valeant shares are down 10% this morning as the last few days' short squeeze and hope-fueled stability in the hedge fund hotel has given way to more 'first mover advantage' across the levered trading community. As we noted here, [3] this is what hedge fund panic looks like.
It seemed like such a good morning...
But it's just more of the same...
[4]
Because at last count there was still 87 hedgies neck deep in this..
And this is what hedge fund panic looks like: after being one of the top 10 most widely held names as recently as Q1, Valeant has seen a plunge in not only its stock price, but also the number of fund who own it. One can be 100% certain that as of November 20 the number is vastly lower than the 87, already a one year low, recorded as of Sept 30.
[5]
Perhaps if only these "smartest people in the room" had actually done their diligence instead of rushing to buy a stock just because others bought the stock or, gasp, hedged their exposure, none of this would have happened. But then again that means doing actual work - why bother when all the idea dinner participants can just hope nobody pulls a SIRF and uncovers a specialty pharmacy ticking time bomb hiding just below the surface.
