Chanos Hedge Fund on CNBC: it's a roll up

Short-seller James Chanos said he’s betting against shares of Valeant Pharmaceuticals Inc. amid its unsolicited $46 billion bid for Allergan Inc., saying the company is “playing aggressive accounting games.”
Mr. Chanos, founder of hedge fund Kynikos Associates, criticized Valeant’s acquisition strategy, noting the pitfalls and potential accounting issues associated with relying on deals for long-term growth. He also suggested Valeant may be bidding against itself in its pursuit of Allergan, a stock which he said he is long.
Valeant earlier this week said it would improve its offer for Allergan after the initial bid was rejected.


“They seem to be negotiating against themselves, don’t they?” Mr. Chanos, founder of hedge fund Kynikos Associates, said Thursday in an interview on CNBC.
Allergan on Monday rejected a stock-and-cash offer from Valeant that was worth $152.89 a share at the time it was announced last month. Allergan said it believed its own earnings and growth are worth more than that offer, and said Valeant’s pledges to cut research-and-development spending would gut Allergan’s prospects.
Allergan has told Wall Street analysts that it has “other options” and could still tie up with another company.
Valeant, which is working with Pershing Square’s Bill Ackman on the deal, responded Tuesday and expressed disappointment that Allergan hadn’t yet engaged in discussions. Mr. Ackman has built a 9.7% stake in Allergan.
Mr. Chanos said he was betting against Valeant because the company operates what he calls a “roll-up strategy,” which involves buying bigger companies to boost growth and diversify revenues.
“Roll-ups present a unique set of problems,” he said. “Roll-ups are usually accounting-driven, and we certainly think that’s the case in Valeant. We think Valeant is playing aggressive accounting games when they buy companies and write down the assets.”
Mr. Chanos said he was shorting Valeant before the company unveiled its bid for Allergan last month. Short sellers borrow shares to sell them in hopes of buying them back cheaper at a later date, aiming to profit from a price decline.
“The only people more negative about Valeant maybe more than me are Valeant insiders,” he said, noting a number of senior executives have left the company over the past 15 months and that there has been “a lot of insider selling.”

 

Valeant is a scam! Soon to implode. If you people think you're getting Allergan- think again! No way in hell even shareholders want any part of this ponzi scheme! Your best bet is to oust Pearson! Too bad he has stolen all your money though! I feel for you employees! It must suck working for such a dysfunctional, mirage of a company! Get out while you can!

 

Suck It Fat Boy.

 

This is what happens when you air all your dirty, filthy laundry. You're done.

 

Hmmm....does this guy have a vested interest in Valeant stock tanking?? Real head scratcher here.

 

Of course it can't just be the truth. Haha!

 

If you are being serious. Then screw you, you complete moron.
If you are so dumb as to ask this question, then you are a moron.
If you are being fecicious, then yes, it is a real head scratcher....NOT!.

 

I agree. Many people in the actual know, agree.
The only people who do not agree are the asswipes at the top of the company and slimey Wallstreet types. You know, the types that do not have to do any real work and juggle numbers around in a spreadsheet on the computer. But THEY are all posers who like to brag about how big their personal bank account numbers are while skirting tax laws and what not.
You know, the douchebags who should be convicted of white collar crime.

 

Video posted under Listen thread for your entertainment.

 

The only roll up chanis knows is a berry tart

 

He was right

 

Chanos is silent now. Realizes what he said was nonsense

 

That's good news for Herbalife. Ackman hasn't called them a criminal enterprise since he cried about it a month ago. I guess he realizes it was nonsense?

 

do you even realize how much money chanos made when he shorted vrx at 140s and covered at 110s?

 

The same amount all the guys that bought at 110 will make when then stock is back at 139.70