Valeant Pharmaceuticals International Inc. (TSX:VRX)(NYSE:VRX) took another plunge, as the latest financial results were a disaster. Bill Ackman is cringing right now; his investment continues to drop further, and it looks to be getting worse before things get better.

Bill Ackman is still on the board, and he still believes in a turnaround, so what should investors do after the horrid Q3 results?

Valeant saw a massive $1.22 billion loss this quarter, and it appears that the acquisition of Salix Pharmaceuticals Ltd. has backfired. There’s no question that Valeant was aggressive when it was acquiring companies from left and right, but now it’s time for liquidation, so it can deal with its massive mountain of debt.

Salix Pharmaceuticals is now worth a lot less than the price that Valeant paid, and it’s clear that Valeant is an M&A disaster. Buying high and selling low is never a way to unlock value, and, as Joseph Papa starts selling off more non-core assets, we may see Valeant get a lower return than what it initially paid for the acquisition.

Valeant has dropped so far, but don’t be fooled into thinking a bottom may be in sight, because there’s still room to drop. The stock is going to face huge volatility in the next year, while the new management team tries to get things back in order.

There’s no question that Valeant is a risky bet at current levels, and 2017 most likely won’t see a huge rebound, as Joseph Papa’s plan won’t be rolled out completely by then, and what we’re seeing is still the aftermath of ex-CEO Michael Pearson’s failure of a strategy.

Going into 2017, we will continue to see disappointing quarters as Valeant looks to continue liquidating non-core assets for, most likely, less than what it paid in the first place.

If you’re a contrarian investor, now may be the time to pick up shares, but there will be a lot of short-term volatility; if you’ve got the stomach to stick with it, then you may be rewarded as Joseph Papa’s management turns the company around. This will most likely happen in the latter part of 2017 or in the early part of 2018.

I do not believe that Joseph Papa will be able to completely reverse the damage Michael Pearson has done, but I do see Joseph Papa bringing the company back on track, and this will take time. If you don’t have a long-term time horizon, then you could potentially get hurt from trading Valeant at these levels.

Valeant has great assets, but there are still alternatives out there; many of the drugs in Valeant’s portfolio are not exclusive. Because of this, pricing pressure may also be a headwind that will suppress earnings going forward.

The stock is dirt cheap right now, but there are still big risks involved with this investment. However, with huge risk comes huge reward, and if you believe in Joseph Papa, now may be the time to pick up shares in Valeant, but expect volatility for the next few months, as the company continues to liquidate its assets.

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Fool contributor Joey Frenette has no position in any stocks mentioned. Tom Gardner owns shares of Valeant Pharmaceuticals. The Motley Fool owns shares of Valeant Pharmaceuticals.