Valeant's U.S.-traded shares closed the day down more than 10 percent, at less than $11 a share and a level not seen since May 2009 during the financial crisis.
Sources told CNBC on Monday that Ackman sold his 27.2 million shares in Valeant at around $11 each. Ackman's Pershing Square Capital Management had purchased the stock at an average cost of $196 a share in 2015, according to the hedge fund's 2016 letter.
Ackman then told CNBC that he sold his stake because it wouldn't "move the needle for Pershing Square, even if the stock doubled from here."
The activist investor's decision to sell his stake in Valeant was a stark reversal, and it sparked jitters among investors.