Our REITs analyst Rob Simone first made the call to short Medical Properties Trust (MPW) in April 2022. The stock price is down over 80% since, falling from over 20 per share to under 4.
For all the success he’s had on his “Best Idea” short call over the past 18 months, Simone describes today’s developments as a top three day for the call. MPW is currently down over 30% today. For the record, Simone was attacked personally and professionally for his short call, but he’s stood by his analysis and held his ground.
Here’s some of what he had to say this morning on The Call @ Hedgeye:
“MPW made a 60 million second-lien loan on what I think is most likely non-existent or rehypothecated collateral just to keep the lights on. Like we’ve been saying for the past two years, (Steward Health Care, one of MPW’s largest hospital tenants) has not been paying any net rent when factoring in the support MPW sends their way.”
“A lot is going to change for people who are getting caught off guard by this…I don’t think much has changed at all. It’s still an unbelievably dire situation for MPW. They need to raise capital like a month ago, they haven’t done so. The cost to do so just went up exponentially for them in a straight line.”
“The bonds, they’ll probably trade off 10+ points today. The equity’s down 20% in the premarket. The company’s going to run out of money. That’s what’s going to happen and that’s what we’ve been saying.”
“Ironically, I’m kind of calm because not much has changed and I think it’s because we really tried to do a deep dive on this company, whereas other people were willing to accept what proved to just be outright lies.”
“That’s how winners win right there,” adds Hedgeye CEO Keith McCullough.
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