Mallinckrodt PLC's stock tumbled as much as 14% in active trade early Wednesday, before paring losses, in the wake of concerns raised by famed short seller Andrew Left surrounding the specialty pharmaceutical company's business model. The stock bounced to be down just 4.3% in recent trade. Volume less than an hour after the open was about 5.6 million shares, which was already more than double the full-day average. On Tuesday, the stock had plunged 15%, the second-biggest percentage decline since it went public in June 2013, on volume of 10.1 million shares, after Left's Citron Research tweeted that investors were starting to realize that Mallinckrodt posed equal risk as Valeant Pharmaceuticals International Inc. . Valeant's stock lost over half its value on Tuesday after the company slashed its financial outlook and said it may breach loan covenants. Left took aim at Valeant in October,alleging revenue-recognition improprieties.
Copyright © 2016 MarketWatch, Inc.
Continue Reading Below