Carson Block’s Muddy Waters announced a new short position in MultiPlan and release a short report on its website. The company “paints a rosy picture of its prospects, but these are inconsistent with the facts: its revenue peaked in 2017, and Naviguard is never once mentioned by management as a threat,” the firm known for short selling said in its report. Muddy Waters does not believe the company’s 2021 forecasts from August can be relied upon. “Given Naviguard’s aggressive roll-out, we believe that MPLN has no choice but to try to buy some form of revenue growth to mask eroding fundamentals, which we see the HST acquisition demonstrating,” it claims. The firm does not believe MultiPlan has enough cash to buy sales and profits to replace lost business. It is concerned that management’s strategy “carries the potential to bankrupt MPLN.” Shares of MultiPlan are down 10%, or 83c, to $7.91 in afternoon trading.
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