NEW YORK (TheStreet) --Shares of Valeant Pharmaceuticals (VRX) are tumbling by 22.22% to $14.88 in mid-day trading on Tuesday, as the drug and medical device making company posted weaker than expected third quarter results. The company also slashed its full year EPS forecast.
The company posted non-GAAP earnings of $1.55 per share on revenue of $2.48 billion for the quarter, missing the $1.75 per share on $2.5 billion in revenue that analysts had been expecting.
Wells Fargo analyst David Maris appeared on this afternoon's "Power Lunch" on CNBC to discuss the Valeant story and how it may end. Maris has a "sell" rating on the stock.
"Well I don't know [how the story will end] because it's a big mystery," Maris said. "The company spent in the last couple of years, $15 billion on acquisitions, but operating cash flow is down. So if you gave me $15 billion and said buy some good stuff I'd be able to find some things."
Valeant has about $30 billion worth of debt, plus another $10 billion owed to other obligations. Wells Fargo spent some time with Valeant's management today urging them to restructure, while the company believes it just needs to refinance.
"Those things sound similar but they're very different," Maris said. "But refinancing after results like today is going to cost them a lot."
CNBC's Melissa Lee asked Maris when the clock will "start ticking" for Valeant to refinance that debt.
"Well the clock is ticking now, but the big maturities happen in 2018, 2019, 2020, so they have a little bit of time. So they're going to sell some assets, payoff the near term debt. But one of the things I think they were planning to do is refinance the near term debt," Maris said.