Case | HBS Case Collection | November 2006

Selling Biovail Short

by Malcolm P. Baker, Chris Lombardi and Aldo Sesia

Abstract

Hedge fund SAC Capital and analysts from Gradient Analytics and Banc of America face charges of stock price manipulation from Biovail, a Canadian pharmaceutical company. Gradient and BofA produced negative reports on Biovail's earnings quality. At the same time, SAC built a large short position in the stock. The defendants must consider specific and general strategic responses to these allegations.

Keywords: Stock Shares; Investment Banking; Asset Pricing; Financial Strategy; Crime and Corruption; Pharmaceutical Industry; Financial Services Industry; Canada;

Citation:

Baker, Malcolm P., Chris Lombardi, and Aldo Sesia. "Selling Biovail Short." Harvard Business School Case 207-071, November 2006.