Citron Research's executive editor Andrew Left addressed the Valeant Pharmaceuticals (VRX) controversy during a Monday session of CNBC's "Fast Money Halftime" report, and his decision on how to handle future disclosures regarding the drug company. The panel also discussed Chipotle Mexican Grill's (CMG) - Get Report E. coli scare, and the attractiveness of The Walt Disney Co.'s (DIS) - Get Report stock.
Valeant, which came under fire in a scathing report by short-seller research firm Citron two weeks ago for allegedly fabricating its sales data, has seen its share price plummet by a third since the Citron report. In the report, Valeant's relationship with specialty pharmacy Philidor came under question, with Citron claiming Philidor created bogus accounts to inflate sales. Philidor contributes nearly 7% to Valeant's revenue. Then on Friday, Left sent out a tweet that he would release an update to the story on Monday that would be "dirtier than anyone has reported."
But when the report was released Monday, it offered no new allegations. Left addressed his reasoning on Fast Money.
"I realized starting on Friday the Valeant story is taking a life of its own and beyond, he said. "And, as you can imagine for me as Citron, to release any new information right now that would be incredibly damning, it would be a lot easier for me to give it to mainstream media who has deeper legal teams and who can deal with the fall out of any accusations that would be made."
He added he does not want to be at the center of the controversy and that the focus should instead be on Valeant, which on Friday discontinued its relationship with Philidor.
When asked about his comments of comparing Valeant's situation to the infamous Enron debacle, which ultimately left the energy company bankrupt and wiped out its shareholders, Left said he has no regrets.
"Enron was more than a stock that went to zero. Enron was a company that had undisclosed related party companies in order to alter their financial statements and, in return, it went to zero," Left said, adding that "we still don't know the nature of what we'll see with Valeant in the next weeks, months or years."
Valeant, meanwhile, provided "Fast Money" with a statement regarding Citron, saying, "Citron admits in its latest report it has no substantiation for further allegations against Valeant. Given that its last report was filled with demonstrably false statements about our business, we are not surprised, even as Citron continues to mislead investors in an attempt to profit while driving down our stock."
Left, however, contended that Valeant is misdirected in focusing on his report when publications such as the Wall Street Journal and Bloomberg have also questioned the drug maker's business and Goldman Sachs downgraded the stock, citing concerns it will be awhile before the "dust settles" for Valeant.
The Fast Money panel also addressed Chipotle and its E. coli scare, with the panel largely still favorable on the stock.
Pete Najarian, co-founder of optionmonster.com and trademonster.com, said Chipotle reacted quickly to the situation when it closed all of its restaurants in Oregon and Washington state, according to a USA Today report. "They will get past this," Najarian said.
Other panelists agreed, with Jon Najarian, co-founder of optionmonster.com and trademonster.com, saying he believes Chipotle is a good buy.
The panel also was favorable toward Disney, pointing to its anticipated December release of Star Wars: Episode VII The Force Awakens.
"Whatever fears there were for ESPN is overblown. Star Wars is coming up in December," said Josh Brown, CEO and co-founder of Ritholtz Wealth Management. Investors were concerned about a decline in ESPN subscribers, as an increasing number of consumers seek to cut their cable bills, or cut the cord altogether.
Joe Terranova, senior managing director for Virtus Investment Partners, agrees Disney is a keeper stock. "It should be a core holding, as it accelerates over $125," Terranova said. Disney was up more than 1%, to $115.16 a share in late afternoon trading.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.