Corporate Governance

                                                                                                            Ling Li (Team2)

                                                                                                            4/14/2016
                                                                        Professor Shelly

Article Name: Valeant Shares Have Best Three-Day Run in Almost 20 Years

Source Time: April 7, 2016 — 4:29 PM EDT

                                              Corporate Governance

 This week was a very good time to buy stock in Valeant Pharmaceuticals International Inc. because the stock gains best stretch on Monday since 1996: 36% gains.

The company acquires many drug companies, and then charge high price for these drugs.

        Corporations has systems of internal governance that determine overall strategic direction, Valeant company also has its own strategic directions: acquisition. However, the company spent a lot of borrowed money on acquisitions, some of which depended on huge, and now effectively verboten, price increases. And its strategy is not a long term growing, it aims at short term because as the company can't make further acquisitions any time soon, given its debt load and new restrictions agreed to with lenders, it's hard to imagine where growth is going to come from. This chapter talks about corporate governance, which is the system of rules, practices and processes by which a company is directed and controlled. Corporate governance essentially involves balancing the interests of the many stakeholders in a company, these include its shareholders, management, customers, suppliers, financiers, government and the community. Corporate governance also provides the framework for attaining a company's objectives like increase stock prices or make big profit etc. So this news is relative to this topic because the company come up strategies to accomplish the company’s objective. Every corporation has its board of directors, which is a group of individuals that are elected as, or elected to act as, representatives of the stockholders to establish corporate management related policies and to make decisions on major company issues. In this news, the board of directors have to solve the company’s remain risks. Its fundamental concerns about its business model remain. This isn't the first time the company or its investors have given a relatively sunny outlook, but there are some bad aspects. Also it emerged Monday that Valeant has fired the whole sales force for Addyi, its expensively acquired and struggling female libido drug.