Revealing mistake: A different horse is used for close-ups and race shots; you can tell by looking at the white patch on Pie-O-My's head, which is much bigger in the close-ups.
Continuity mistake: While standing outside the horse's stall, Ralphie's arms go from being at his sides, to folded across his chest throughout the whole scene.





Answer: The show creators intentionally left it ambiguous as to what happened to Valery.
LorgSkyegon