Valeant Pharmaceuticals (VRX) is in hat-size territory. This means its stock price has fallen below $10 a share. So maybe that's a large hat, but that's beside the point.

The stock is below $10, and down over 6%, as it seems the company is having a hard time selling its iNOVA business for the $1 billion they were looking for. Bids came in at around $900 million, according to reports.

Why is this a problem? Well, when you have about $30 billion in debt and a shrinking revenue stream, you need to sell your asset for as much as you can. It shouldn't come as a surprise that the stock is reacting negatively. It just puts more doubt on what the asset may be worth. Remember that something is only worth what a buyer is willing to pay. 

Trading 101 teaches us that when you figure out that a large seller is looking to get out of a position, you move lower and wait for that seller to come to your price. The same rules apply to anything in life. In this case, would any buyer want to step up and pay for an asset if they know a seller is potentially looking to unload? Lay in the weeds; they'll come knocking. 

We have talked about VRX numerous times as a dangerous place to be; this continues to be the case. It is likely that revenue and EPS estimates are going to continue to come down. In fact, the bigger question that one should be thinking about is the company's balance sheet and whether or not those assets start getting written down as well. Just take a look at Valeant's last 10-K, which showed it had $18.8 billion in intangible assets and $15.7 billion in goodwill. (See also: The Contrarian: Analyst Crapshoot on Valeant.)

Be careful with this one. Things can still get worse.