PACS Group Stock Plummets Following Scathing Report from Hindenburg Research

PACS Group, Inc., a Utah-based operator of skilled nursing facilities, saw its stock plummet significantly on Monday, November 4, 2024, following a damning report from Hindenburg Research. The report alleged that PACS Group has been “systematically scamming taxpayer-funded healthcare programs” through various billing and staffing schemes.

The stock gapped down before the market opened, dropping from a previous close of $42.94 to an opening price of $41.37. By the end of the day, the stock had fallen as much as 33%, reflecting a sharp decline in investor confidence.

Hindenburg Research’s 5-month investigation involved interviews with 18 former employees, competitors, and an analysis of over 900 detailed facility-level cost reports. The firm concluded that PACS Group’s ‘turnaround’ strategy was largely based on fraudulent practices, which could lead to significant regulatory penalties if uncovered.

Despite recent positive analyst reports and price target increases from firms like Truist and UBS Group, the revelations from Hindenburg Research have cast a shadow over the company’s future profitability and legitimacy. Analysts had previously forecast growth and issued “buy” ratings, but the new allegations have raised serious concerns about the company’s operations and leadership.

The company, which serves 29,000 patients daily across its skilled nursing facilities, now faces the risk of being exposed as an “unprofitable roll-up of distressed SNFs with no path to legitimate profitability under the current profoundly corrupt leadership,” according to Hindenburg Research).