Cramer: Maybe We Just Thank Andrew Left

 | Jul 14, 2016 | 6:41 AM EDT
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vjet

I'm getting a lot of social heat about our story yesterday by our Fill or Kill team's James Passeri. That was Andrew Left's decision to once again short Valeant (VRX) .

http://realmoney.thestreet.com/articles/07/13/2016/andrew-left-taking-ne...

I hear grumblings about how Left got it wrong, that he liked it, not he hated it, that he has been flip-flopping.

What a pile of garbage.

The fact is that Left was the first one to call attention to the questionable accounting and arrangements with a captive sub at Valeant that ultimately caused the stock to plummet more than 130 points. He raised the issues for all to see and got a lot of people out of the stock much higher.

Then he watched it plummet, until he was willing to buy some stock against puts.

What's more important than whether he has flip-flopped or not -- and I think he's been so good on it and has disclosed so properly that I don't get the gripping -- is the reason he gave, which is the liquidation of Sequoia's position, the second largest holder with 20%, that was announced yesterday.

"They sat down, they've seen, they interviewed and they walked," he told Fill or Kill.

Given their insider take, "the fact that they are selling tells everything."

Hence his Titanic metaphor.

Oh, and just to seal the deal, the man who put this story together, Michael Pearson sold 5 million shares.

If there were credible plans for Valeant to get out from under $30 billion in debt, why would Sequoia sell? Why wouldn't Pearson hold on if he knew, for example, that he had cobbled together some saleable assets that would pare the debt to more manageable levels?

In fact, we have to wonder why in heck it took Passeri's interview with Left for the stock to go down. Who was stepping up and buying it in line when we got the news of Sequoia's liquidation? Perhaps people who figured, "Ahah, that's who knocked it down and their selling is done so it's ready to bounce?"

Isn't that what already happened? You got the bounce. Why not sell it?

Is it "obvious that it is a zero now" as Left portrays the story?

I know this: Nov. 20, 2013, with the 3D printer craze just at its height, Left wrote one of the most brilliant pieces of research I can ever recall on the red-hot stock of a company called Voxeljet (VJET) when it stood at $59 a share. I will never forget the title of this Citron gem: VJET is a Total F**king Joke. He eviscerated the company, noting that it had only sold three 3D printers and they were heavily subsidized. He noted insider sales and said that the whole group was overheated anyway but, in a line that echoes his Titanic pronouncement, he asked: "How is this company even public?"

Voxeljet is now at $4.57.

I remember when he came out with this one. I thought it was over the top, but it sure got my attention and it reminded me how perilous this group could turn out to be.

Was Voxeljet a total f**ing joke? I think what's more important is if you read this report you sold in the $50s. I think that's akin to what he told James Passeri when he said, "It's already a sinking ship. With the Titanic going down you can at least get on a lifeboat and get out with what you can."

Why don't the bulls on the stock ever consider how right Left's thesis was? Why don't they acknowledge that a manager that held 20% of the stock wouldn't exit it all if the manager felt that Joe Papa, the CEO, had a credible plan to get the company through what has to be considered a difficult time? If the debt load were manageable under Pearson it certainly would be manageable under Papa, right?

So, moan all you want. I remember how angry the holders of Voxeljet were with Left. Maybe they still are? I mean, it's still a public company. But that's a pretty low bar for a stock that fell from the $50s to $4 after Citron had done the work and correctly analyzed the situation.

I was surprised when I heard Citron say he was no longer short Valeant. But when he said he bought stock against puts that always left the opportunity open for him to become short in a flash by selling his common.

I say this to those who are angry: Left's not telling you to do anything. He's disclosing what he's doing. Maybe you just say thank you and move on.

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