Scorecard checks back on our headlines from a year ago.
Then: In a letter to John Fry, Community Health Systems Inc.’s board chairman of the nominating and corporate governance committee, activist investor ASL Strategic Value Fund called for CEO Wayne Smith to be ousted from the company, saying management missteps had “resulted in billions of dollars of shareholder losses.” The letter came after years of significant struggles by CHS, primarily caused by its massive 2014 acquisition of Florida-based Health Management Associates. The company’s stock price was trading below $8 at the time, down more than 80 percent from two years earlier.
Now: Smith remains CEO of the embattled company and received a vote of confidence from CHS’ top investor, Chinese investment firm Shanda Group, in January. The firm purchased almost 1.5 million shares of CHS stock, increasing its stake in the company to 24 percent. CHS has sold about 40 hospitals since the HMA deal and refinanced billions of debt — but it hasn’t helped the company’s stock price. Shares of the Franklin-based company closed at $2.69 on July 16, the lowest since its second initial public offering in 2000. Emails and phone calls to ASL were not returned.
Next: In its second-quarter earnings report, CHS reported a loss of $110 million for the quarter, compared with $137 million during the same period last year. On a per-share basis, adjusted for gains and losses from operations, the loss represented 1 cent per share, beating analysts’ expectations of a loss of 43 cents per share. Smith said his team’s strategies are beginning to pay off, and while the company will continue to try and improve its portfolio, the company feels “comfortable” in the markets it’s in.
“We have a substantial number of markets now that are showing outstanding performance,” Smith said on a call with investors. “We still have opportunity left, but we’re seeing good performance.”
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.