William Ackman said on Wednesday he believes Valeant Pharmaceuticals International (VRX.TO) will once again become “investible” as the billionaire investor addresses his shareholders amid a record quarterly loss for his hedge fund. Valeant shares surged following Ackman's comments. 

“Today, Valeant’s stock trades where it does largely because investors have lost confidence I think first in the financial statements of the company, largely due to accusations of malfeasance or inappropriate accounting,” Ackman said on a conference call. “Two, I think they’ve lost some confidence in management of the company, and also perhaps some concerns with the governance of the company.”

Ackman added he believes that as each of those issues are addressed, investors will regain confidence in Valeant, and the drugmaker will shed its image as being “uninvestible.”

Ackman's Pershing Square Capital Management blocked off one hour on Wednesday for him and his analysts to walk investors through exactly how one of its funds lost 25 per cent in the first three months of 2016, including bets on Platform Specialty Products, Herbalife and Valeant.

The losses are a severe blow for one of the hedge fund industry's most closely followed investors and come on top of a record 20.5 percent drop in 2015.

“It’s a tough thing when you’re a high-conviction investor,” said David Burrows, president and chief investment strategist at Toronto-based Barometer Capital Management, in an interview with BNN. “[Ackman] is going to face some real challenges here because he’s been really wrong.”

Ackman has already told investors that he plans to take a far more active role in Valeant and last month joined the company's board, cementing his commitment to the company for some time. The board is looking for a new chief executive and is committed to filing a long-delayed annual report by the end of April.

Ackman said on Wednesday he is cautiously optimistic Valeant’s board will have new management selected within weeks, not months. And he believes Valeant is an ideal company to inherit as CEO.

“Because of all the M&A activity in pharma, there are lots of candidates who are available. There are also people in other businesses who find this opportunity extremely attractive,” he said. “The best time to be CEO is when expectations are extremely low and the starting valuation is very low, and Valeant certainly offers that. … You don’t want to be CEO after Jack Welch has run the company.”

Five months ago Ackman held a call that lasted nearly four hours as he tried convince investors that Valeant was still a good buy. That message seemed to fall on deaf ears as the stock price has tumbled nearly 70 percent since then.

Ackman lost roughly $1 billion on his Valeant investment in one day last month when its stock fell 50 percent on fears it could default. That prompted even long-time Valeant supporters such as Brave Warrior Advisors' Glenn Greenberg to liquidate half of his stake.

Overall, Ackman's investors appear to be sticking with him. Redemption requests for the first quarter totaled roughly 2 percent of the firm's roughly $12 billion in assets.

"This is going to be a badly scraped knee that may even require stitches but it is not life threatening," one Ackman investor said about the losses and Valeant situation.

The structure of Pershing Square shields it from a sudden sharp loss of capital - investors can only withdraw their money gradually and some of them can only exit by selling shares to another investor.

In a rare piece of good news, Valeant said on Tuesday that it has finished an internal review and found no additional problems that would require further restatements of its financial statements. Its shares climbed 10 percent.