Where now for NMC Health as share price tumbles?
Shares in the FTSE 100-listed hospital operator have fallen more than 30% since Tuesday, after US-based short-seller Muddy Waters waded in and accused the company of mismanagement and manipulating its balance sheet.
NMC Health has seen its share price tumble by more than 30% since Tuesday, after US-based short-seller Muddy Waters waded in and accused the company of mismanagement and manipulating its balance sheet.
NMC Health is trading at £17.50 as of 14:50 GMT on Wednesday.
Muddy Waters takes short position against NMC Health
The US-based hedge fund Muddy Waters has taken a short position against NMC Health, after it expressed ‘serious doubts’ about the health of the hospital operator’s balance sheet and said that the company had ‘deliberately understated’ its debt by around $320 million.
‘We have serious doubts about the company's financial statements, including its asset values, cash balance, reported profits, and reported debt levels,' Muddy Waters said in a statement.
‘At the worst of times, the company has invested in large assets at costs that we find too high to be plausible – including from parties we believe are de facto under common control.’
'This behaviour gives rise to concerns about fraudulent asset values and theft of company assets.'
Short interest builds against NMC Health
Muddy Waters isn’t the only financial institution to take a short position against NMC Health.
AQR Capital Management has a 2.69% position against the stock, alongside PSquared Asset Management (1.10%), Portsea Asset Management (0.71%) and Gladstone Capital Management (0.51%), according to the Financial Conduct Authority’s daily short position report.
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