(Bloomberg) — Shares of nursing home operator PACS Group Inc. tumbled as much as 48% 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, which made its debut as a publicly traded stock in April. PACS pared its decline, but is still on track for its worst day since its initial public offering. The stock closed at a record high of $42.94 on Friday, more than double the IPO 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 as much as 4.7%, the worst intraday drop since Aug. 5.
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.
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