For over a year, Hedgeye REITs analyst Rob Simone has alerted our subscribers and institutional investors to the red flags at Medical Properties Trust (MPW). Today, a broader audience was made aware of the company’s shortcomings.
CBS News has been airing "an ongoing CBS News investigation into the role played by private equity in the collapse of hospitals serving some of America's most vulnerable residents." In the latest iteration of that ongoing CBS investigation, MPW was featured prominently in Monday's video and article, which included commentary from Simone.
Watch the two part CBS News investigation below.
From the CBS article:
In December, CBS News reported on a series of financial moves executed by Prospect Medical management and its private equity backers that legally siphoned money away from hospital operations before the closure. The first move was in 2018 when Prospect Medical's owners took out a $1.12 billion loan and paid themselves a $457 million dividend.
After paying themselves the $457 million dividend, Prospect Medical's owners then sold off the land and the buildings of the Pennsylvania health system to a Birmingham, Alabama-based firm called Medical Properties Trust.
"Put simply, they bought the real estate out of Prospect and leased it back to Prospect," Simone explains in the video above.
MPW has been a Hedgeye Best Idea Short dating back to April 12, 2022. Since then, MPW shares are down more than -50%.
“I think [the MPW story] is gaining traction in places we didn’t expect,” Simone said this morning on The Call @ Hedgeye. “We’re not looking for attention, but we’re happy to answer questions honestly as they come, so that was the purpose here.”
“Anyone on Wall Street who does their job should be well-aware of our research on this,” Hedgeye CEO Keith McCullough added. “We appreciated CBS coming to Hedgeye. If you’re a legit journalist, why wouldn’t you use Hedgeye’s resources when we’re open and ready to help you?”