Valeant's Pharmacy Relationships Were Complicated [BloombergView]
Boy, were they ever! Matt Levine's comprehensive look at the l'affaire Valeant is worth your time, but it seems to boil down to this:
Valeant acquired economic ownership of a network of specialty pharmacies, and, it presumably thought, enough control of that network to protect its economic interests. Then one member of that network, presumably a bit confused about who exactly owns whom, sued Valeant, and the whole network has become a nightmare for Valeant. It just seems to have gotten the ownership bundle wrong: Its control wasn't strong enough to avoid problems at the network, but its economic interests are enough to make those problems Valeant's own.
In other words, Valeant wanted to structure relationships with these specialty pharmacies to try to maximize the upside and minimize the downside. It may have gotten that, but it's extraordinarily complicated and when journalists and hedge funds start looking at the structure and asking questions, they can't help but be skeptical when they are given vague responses and non-answers. Valeant is now asking the SEC to investigate Citron Research, which is pathetic and desperate and in no way helpful other than to make everyone even more skeptical.
Tax Court dispenses with pot dispensary deductions [Tax Update]
I live in Colorado, so I'm partial to the retail marijuana industry's efforts to make it a legitimate enterprise. One huge obstacle to those efforts is in the tax code, Section 280E, which disallows deductions or credits for:
any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.
The exception to this rule is cost of goods sold, so I guess a stripped-down version of your average dispensary's income statement has about three lines? Joe Kristan writes about the tax court case of Canna Care, a medical marijuana dispensary in California that fought the law and…well, you know the rest:
We have previously held the sale of medical marijuana pursuant to California law constitutes trafficking within the meaning of section 280E… DOJ memoranda and FinCEN guidance released after the years at issue that represent exercises of prosecutorial discretion do not change the result in this case. Petitioner regularly bought and sold marijuana. This activity constitutes trafficking within the meaning of section 280E even when permitted by State law.
And that's it. Banking is one obstacle for the budding pot industry, but Section 280E may be even more of a buzzkill.
How a spreadsheet helped me tackle my depression [Quartz]
Everyone experiences ups and downs, so if any of you Excel ninjas out there want an inspiring idea for beating the blues, you'll enjoy this story of a woman who built a spreadsheet of all the things that will bring her out of the dumps:
[B]efore I knew it, I had more than 700 items. One of those items was spreadsheets, so naturally I made a spreadsheet out of the list. My spreadsheet came complete with categories I can sort, such as “does this thing cost me money” and “can I access this thing now or later.” If I’m feeling broke and stuck and need an activity to lift my spirits immediately, I have a filter that shows me all of the stuff I can do for free, right now. If I want to work toward a larger goal—say, a reward for exercising three times a week, which is another one of my depression-management tools—I can sort by the items that need some planning.
Excel can do anything.
Marvell Stock Plummets After Accounting Firm PwC Resigns [Bloomberg]
But not before PwC made some suggestions:
PwC advised Marvell that it needs to expand its 2016 audit, according to the statement. The accounting firm also questioned whether senior management set a “tone for effective control.” PwC also called for scrutiny of Marvell’s process and judgment in taking reserves to cover litigation, royalty expenses and financial reporting.
Some parting wisdom, you might call it.
In other news:
- 96% of the S&P 500 discloses which corporations they use to benchmark executive pay. [WSJ]
- Why a 'Star Wars' Emperor Won Office in Ukraine [Bloomberg]
- Things Donald Trump says: "My father gave me a small loan of $1 million." [NYP]
- "[S]ome population centers in the Middle East 'are likely to experience temperature levels that are intolerable to humans.' " [NYT]
- Titanic cracker. [UPI]