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The new Enron - Implications for the market?

Discussion in 'International Markets' started by basilio, Oct 25, 2015.

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  1. basilio

    basilio

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    Some members might be aware of the unravelling of the multi-billion dollar Valeant Pharmaceutical Co. Essentially it looks like re -run of Enron and when one reads what has gone down so far it seems highly unlikely to have a happier ending.

    This is a company that was valued $90billion earlier this year. Wonder what the impact will be on the markets as it plays out.

    Interestingly enough one of the first people to call it out as dodgy was John Hempton from Bronte Capital. He has a long history of identifying companies that have doubtful legitimacy, outlining the case and then shorting the hell out of them.

    http://brontecapital.blogspot.com.au/

    http://www.canberratimes.com.au/bus...n-moment-for-the-markets-20151023-gkgnxs.html
     
  2. basilio

    basilio

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    Re: The new Enron - Implications for the market ?

    Had to add a little story that John Hempton (purportedly) told hs 12 year son to explain his work as a short seller of shares.

    Fun interesting..

    http://brontecapital.blogspot.com.au/2012_04_01_archive.html
     
  3. basilio

    basilio

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    So Monday came and went and Valeant held a press conference to (try) and bat away the questions surrounding it's marketing and finances.

    The hole is getting deeper. Turns out not only did they set up their own captive speciality pharmacy but it seems that Valeant staff worked there under false names. Why is this so ? John Hempton sums it simply

    http://brontecapital.blogspot.com.au/

    Meanwhile Valeant is trying to get the SEC to investigate the US company that called it out on it's practices.!
     
  4. Tyler Durden

    Tyler Durden

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    This is the first I've heard of it. Wonder why it hasn't been in mainstream media?
     
  5. skc

    skc Goldmember

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    Thanks for sharing this. A very interesting story.

    I think Sino Forrest tried to sue Muddy Water for exposing it... or something ridiculous like that.

    Shorting fraud is a pretty specialist field.
     
  6. Tyler Durden

    Tyler Durden

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    Sorry I meant why hasn't there been any news on Valeant.
     
  7. skc

    skc Goldmember

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    Do you mean news in Australia mainstream media? Probably because it's not nearly as interesting as what "name your pop star" has been wearing of late!

    There's been plenty of media coverage in the States.

    Note that Valeant hasn't collapsed like Enron yet. It's being accused of doing something dodgy and it's struggling to overcome those accusations... but you can give them beneift of the doubt and say there's no actual proof of anything illegal happening yet.
     
  8. basilio

    basilio

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    No proof of actual wrongdoing/ anything illegal SKC ?

    Not quite sure what that means. If you read the material compiled by John Hempster there seems to be a mountain of evidence to show illegal behaviour with regard to running captive pharmacy's and other activities.

    At this stage it hasn't been before a court do it hasn't been formally found guilty of wrongdoing. And of course the way the law works nothing still might occur. However the financial jiggery pokery may well cause investors to bail out quickly.
     
  9. skc

    skc Goldmember

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    Proof of something illegal can only be achieved through the court of law. There may be lots of evidence... but it has yet to reach the definition of proof.
     
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