Valeant's defense does little to improve social media sentiment

Mon Oct 26, 2015 5:40pm EDT
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By Angela Moon

NEW YORK Oct 26 (Reuters) - Social media circles remained critical of Valeant Pharmaceuticals International Inc on Monday despite the drugmaker's efforts to defend itself against accusations of an accounting fraud.

On a 75-minute conference call with investors and analysts, Valeant executives said they had asked U.S. securities regulators to investigate "completely untrue" allegations from research firm Citron that the company used its ties with a specialty pharmacy to inflate revenue.

But Valeant's social media sentiment score remained mired in negative territory, according to Thomson Reuters social media monitor, a tool that tracks and aggregates positive, neutral and negative tweets on a company to generate a sentiment score.

By late afternoon, its score stood at negative 15.89, down from negative 7 on Friday. A score above 0 means there are more positive mentions of the company than negative ones, suggesting Valeant still has a long way to go to restore investor confidence after its share price fell 58 percent in two months.

Volume of tweets soared by more than 270 percent from Friday, with traffic being the highest just as the conference call kicked off at 9 a.m. ET. Sentiment remained largely negative on an intraday reading.

Valeant shares are down about 23 percent since the influential shortseller Citron Research last week said the Canadian drugmaker used specialty pharmacies to create "phantom sales". Thomson Reuters social media score was at negative 15 on Wednesday with volume of tweets soaring to its highest in at least a year.

Among trending hashtags associated with Valeant on Monday were #enron and #fraud.

About a dozen executives, a former chief financial officer and directors made up Valeant's defense team on a conference call with investors and analysts on Monday. Chief Executive Officer Mike Pearson said some of them were operating on little sleep.

The call included an unequivocal endorsement of Pearson by lead director Robert Ingram. (Reporting by Angela Moon; Editing by David Gregorio)