Dear Mr. Berko: I was looking up Valeant Pharmaceuticals, which has many products, especially in the eye care business. I wear contact lenses and have various eye problems for which my ophthalmologist has prescribed several medications made by Valeant. I just looked up the stock, and I could buy 100 shares. What do you think?
— D.M., Erie, Pa.
Dear D.M.: I think you ought to look it up a heck of a lot better so you can make a more informed decision. Keep reading.
In March 2015, Valeant Pharmaceuticals (VRX-$15.42) was trading at a tad over $200 a share. At that time, a reader from Cincinnati asked what to do with 200 shares she had bought precisely two years earlier at $68. The reader asked me whether the stock should be sold and, if so, what she should do with the proceeds. I told her to sell VRX and buy Johnson & Johnson. I don’t know whether she bought Johnson & Johnson, but I know she sold VRX at $191. I know because in early August 2015, I received a demand letter from her lawyer. He wrote three pages of tedious garbage, saying VRX was now trading at $250 and arrogantly demanding that I pay the difference between her selling price and $250 because I “should have known that there was significant appreciation remaining.” Three months later, VRX was trading below $100, and today it trades at $15.42. As Dick the Butcher offered in Shakespeare’s “Henry VI,” “let’s kill all the lawyers.”
Valeant was run by a bloody covey of crooks who conspired (with their lawyers) to exponentially raise certain drug prices. They reckoned that the consequential enormous profits would greatly increase the market price of VRX stock and that the public was too feckless to complain. VRX went viral, running from $68 in 2013 to over $260 in August 2015. But the public complained.
