(Bloomberg) — Shares of nursing home operator PACS Group Inc. tumbled 28% on Monday after Hindenburg Research released a short report alleging that the company has been — among other things — “systematically scamming taxpayers.”
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The drop triggered volatility halts in the shares of the health-care firm, and had PACS notching its worst day since its debut as a publicly traded stock in April. The stock had closed at a record high of $42.94 on Friday, more than double the initial public offering price of $21.
PACS, which is based in Farmington, Utah, didn’t respond to a Bloomberg News request for comment.
PACS manages about 284 nursing facilities across 16 states and serves more than 27,000 patients daily, according to a recent filing. Last week, PACS said it had closed the acquisition of eight nursing homes in Pennsylvania, with four of the facilities being leased from CareTrust REIT Inc.
Shares of CareTrust fell 4%, the worst one-day drop since September 2022.
Last month, Hindenburg took aim at Roblox Corp., saying in a report that the company inflated key metrics and alleging that it doesn’t have sufficient safety screens to protect children using the platform. Earlier this year, Hindenburg released a report on Super Micro Computer Inc., saying an investigation revealed “glaring accounting red flags.” Super Micro delayed filing its annual financial disclosures following the report.
Shares of PACS, which were valued at about $6.7 billion at Friday’s market close, had rallied on the back of two quarterly earnings reports that topped estimates as well as a boost to its revenue and profit guidance for the year.
PACS is scheduled to report its third quarter results Thursday after the market close.
(Updates with closing prices throughout.)
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