First DD, not sure I am doing it right
**TL;DR: Risky bet on recovery of $PACS after potential dismissal of covid-era fraud**
**I've been long PACS for a while**
**Positions: (see screenshot)**
Excellent DD by another regard: [https://www.reddit.com/r/wallstreetbets/comments/1fgnku5/pacs\_prestige\_acquisition\_finalized\_so\_earnings/](https://www.reddit.com/r/wallstreetbets/comments/1fgnku5/pacs_prestige_acquisition_finalized_so_earnings/)
$PACS - skilled nursing facilities (SNF) assisted living facilities in the USA (in short Nursing home)
Provides senior care and independent facilities, buy/lease real-estate for health care related properties
Founded in Utah in 2013, IPO in 2024
Similar company: $ENSG
Revenue: Coming from leasing facilities and insurance reimbursement based on the number of residents
Finalized acquisition by taking over operations of Prestige Care’s entire SNF portfolio i.e 56 facilities across 6 states and added 2889 skilled nursing beds
Occupancy rate of 94% for all facilities they have managed for 18 months
Why PACS?
Hindenburg research made a claim that PACS is inflating their numbers by abusing covid era waiver to make more money as well as misleading investors with wrong CMS ratings.
The claim is that the same revenue cannot be achieved and possibly fraud
What's the waiver about? It allowed beneficiaries to receive Medicare-covered SNF care without a prior hospital stay of at least three days. It expired with the end of the federal Public Health Emergency (PHE) on **May 11, 2023**
=> PACS have seen a sharp decline after those allegations leading to more than 60% decline, below it's IPO price!
Furthermore, they delayed their earnings because of that only releasing preliminary earnings: [https://ir.pacs.com/news-events/press-releases/detail/113/pacs-group-provides-preliminary-third-quarter-operational-metrics](https://ir.pacs.com/news-events/press-releases/detail/113/pacs-group-provides-preliminary-third-quarter-operational-metrics)
So:
\* Based on it they are still beating expectations and they stated that they are aware of those allegations and working with government entities and another 3rd party audit to make sure that they were always compliant.
\* Fraud allegations are not related to cooked books but rather using Covid-era to pump up revenue
\* Covid era waiver is long gone but revenue is still up
This could go both ways: if the claim made by Hindenburg research was actually wrong PACS could easily go back to $40 (i.e almost doubling current price)
If it was indeed true, expect PACS a loss of revenue in the next earning release or two but **the nursing facilities and occupancies aren't going away**.
**This isn't financial advice, I am just a regard who likes stocks**
https://preview.redd.it/iq033ejqai2e1.png?width=784&format=png&auto=webp&s=368e918a434d27c7709e27925821823d73dfdd51