Francis Chou Comments on Bausch Health

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Sep 02, 2022
Summary
  • We were able to sell approximately 61% of the shares that we had in Bausch Health.
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Bausch Health Companies Inc. (

BHC, Financial) (“Bausch Health”)

In early August 2020, Bausch Health announced that it is planning to spin off its eye care business, Bausch + Lomb, into an independent publicly traded company. This will allow the company to concentrate on its gastroenterology, aesthetics/dermatology, neurology and international pharma business.

If Bausch Health had spun off Bausch + Lomb when it was announced in 2020, we would have made a healthy gain; but the two-year delay has considerably eroded the prices that Bausch Health could have fetched for Bausch + Lomb.

In hindsight, it was a mistake to wait for the spin-off of the Bausch + Lomb unit. At the time, we felt this would have been the much-needed catalyst to get Bausch Health to trade closer to $40 per share.

In consolation, in 2021 and the first half of 2022, we were able to sell approximately 61% of the shares that we had in Bausch Health for an average price of US$24.30 per share. In addition, we received close to US$8.00 per share in premiums for writing covered call options on some of the shares.

From

Francis Chou (Trades, Portfolio)'s Chou Associates Fund semiannual 2022 letter.

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Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure
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