Valeant stock plunged after the Canadian drug maker cut its 2016 outlook and warned of a possible debt default. Bobbi Rebell reports.
It was the busiest trading day in company history for Canadian drug maker Valeant, but there was nothing to celebrate. The heavy volume was sellers pushing shares sharply lower after the company slashed its 2016 outlook, and warned that a delay in filing its annual report could mean a debt default. The delay would be a breach of its credit agreements, in turn triggering the default. Then it could get worse. A default could prompt lenders to demand faster repayments, and then it gets harder to borrow. Investors are losing patience. Valeant stock had already lost three-quarters of their value since their August high. Tim Chiang covers Valeant at BTIG: (SOUNDBITE) TIM CHIANG, MANAGING DIRECTOR, BTIG (ENGLISH) SAYING: "I think, the issue that management has is still credibility. The market is looking for nuggets, or clues, in terms of whether there is some form of stability at the company, and I don't think we got that today. " Valeant's troubles are many. A string of acquisitions has saddled it with heavy debt. It's now looking to sell some non-core assets. But its CEO who just returned from medical leave, Michael Pearson, didn't specify what it would sell. Valeant is also the target of U.S. investigations into its business and accounting practices.