NMC Health tumbles up to 27% after Carson Block’s Muddy Waters says it’s short

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Markets Insider
  • NMC Health, a United Arab Emirates healthcare company listed in London, crashed as much as 27% on Tuesday.
  • The stock fall came after Carson Block’s Muddy Waters Capital said it is short the stock.
  • The company which is the largest healthcare business the UAE, lost more than £1.2 billion ($1.6 billion) from its market cap in the space of an hour.
  • Muddy Waters said that it had “serious doubts about the company’s financial statements, including its asset values, cash balance, reported profits, and reported debt levels.”
  • A request for comment from an outside representative for NMC was not immediately returned.
  • View Business Insider’s homepage for more stories.

NMC Health, a United Arab Emirates-based healthcare company listed in London, crashed as much as 27% on Tuesday morning after Carson Block’s Muddy Waters Capital said it was shorting the stock.

The company, the largest healthcare business the UAE, lost more than £1.2 billion ($1.6 billion) from its market cap in the space of an hour. The stock was trading at about 1,960 pence, or 25% lower, at 11:48 a.m. in London (6:48 a.m. ET.)

In a note, Muddy Waters said that it had “serious doubts about the company’s financial statements, including its asset values, cash balance, reported profits, and reported debt levels.”

NMC Health did not immediately respond to a request for comment from Business Insider.

It’s a heavily shorted stock, with short interest at about 25% of free float, Bloomberg said, citing IHS Markit data.

Hedge funds have piled into short positions in NMC, with AQR Capital and PSquared Asset Management shorting 2.7% and 1.1% of the shares, respectively, according to short selling research firm Breakout Point.

Those positions are worth up to 38 million pounds and 16 million pounds, respectively, Breakout Point said.

Breakout Point told Markets Insider that short sellers stand to gain as much as 332 million pounds ($438 million) from the stock’s plunge.

Unlike in the US, many European regulators require disclosure of short positions above 0.5% of the stock.

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Breakout Point