Bill Ackman may have lost close to $2 billion on his big Valeant bet

Hedge fund manager Bill Ackman has potentially lost close to $2 billion on paper on his hedge fund's largest stock holding.

Canadian drug company Valeant Pharmaceuticals is getting hammered after short-selling firm Citron Research published a report comparing it to Enron.

Valeant's share price was last trading down 30% at about $102. The stock had fallen as low as $98.35.

Ackman's Pershing Square Capital Management owns 19,473,933 shares of Valeant, or a 5.7% stake, according to a securities filing. Pershing Square is the third-largest shareholder of Valeant.

Ackman disclosed his position in Valeant on March 17, when the share price was $200 per share. At that share price, the position was worth $3.9 billion.

Assuming Ackman hasn't bought or sold any shares, his position is currently worth $1.98 billion. That would represent a loss of close to $2 billion.

Valeant's stock has come under pressure in recent weeks. In late September, Democrats on the House Oversight and Government Reform Committee sent a letter to the committee's chairman, Jason Chaffetz (R-Utah), asking him to subpoena the pharmaceutical company for documents related to price increases of acquired drugs.

At the Bloomberg "Most Influential" Conference this month, Ackman said that drug repricing is a very small part of Valeant's business.

He later added: "Valeant has made a massive contribution to drug development, more so than almost any other company."

In the spring of 2014, Ackman teamed up with Valeant to pursue a hostile takeover of Allergan, the maker of Botox. All of Ackman and Valeant's offers were rejected.

At the time, Ackman didn't own any shares of Valeant. He couldn't own Valeant shares while they were working on the takeover together.

Ackman made around $2.6 billion on his position in Allergan after the company was acquired by Actavis in a $66 billion deal in November.

Pershing Square was the best-performing hedge fund last year, returning 40.4%. This year is a different story.

Pershing Square Holdings, the publicly-traded vehicle for the fund, was down 9.4% for the year to October 13.

Here's a chart of Valeant's stock for this year: