Antya Investments has published a contrarian report on Well Health Technologies
More details at : https://www.antya.ca/research/well-health-technologies-corp-it-is-a-bird-it-is-a-plane-noooo-it-is-a-torpedo-it-will-blow-up/
(Note: The views in the report are those of Antya Invesments Inc. only and do not represent Stock Target Advisor’s views. Stock Target Advisor also does not make trade recommendations)
Well Health Technologies Corp. : It is a Bird, It is a Plane, Nooooo! It is a Torpedo. It will Blow-Up.
“This is why, aspirationally speaking, we like to refer to ourselves as the Berkshire Hathaway of tech-enabled healthcare.” Q4-2020
“…capital allocation decisions are centralized and thoughtfully planned to ensure that the company is always making the most compelling and accretive investment decisions.” Q3-2020
“It should also be noted that WELL is increasingly seeking investments and situations where its business unit leaders assist with WELL’s capital allocation goals.” Q4-2020
Hamed Shahbazi, Founder, Chairman and CEO
The old idiomatic expression “If wishes were horses, men would fly” aptly describes the predicament of Well Health Technologies Corp. (“Well,” or the “Company”). How does Well get off the acquisition treadmill without decimating its stock price and soaring expectations of investors in the marketplace? While Well wrestles with self-inflicted wounds and its philosophical conundrum, we strongly urge all investors to decamp and not wait for the inevitable demise of its lofty valuation and stock price.
There is no proprietary or path-breaking technology at Well. We believe that Well is masquerading as a healthcare company to delude Canadian institutional investors into buying its stock, given that Canada has few investable homegrown healthcare companies. That top management of Well is confused is evident from the change in tone highlighted in the quotes from Q3-2020 and Q4-2020.
Evidently, the CEO is abdicating all responsibility given multiple sub-optimal, high-priced, and value-destroying M&A transactions consummated under his watch. CRH Medical Corporation (“CRH”), the most recent and the largest, described as “monumental” in a recent press release, is also the worst of the lot. We agree that it is a “monumental” fiasco.
We believe Well’s misunderstood position as a virtual care entity, backed by a rising stock price based on COVID-19 telehealth frenzy, is enriching insiders at the expense of outsiders. Top management of Well is using an inflated stock as currency to lull investors into believing in its growth prospects. While all future write-downs at the Company will be non-cash in nature, the imminently significant decline in wealth for those that came late to the Well party, including those purchasing the CRH subscription receipts, is likely to render them in critical care.
We also believe that valuations accorded to two key transactions, Insig and Circle Medical, are borderline duplicity and that investors should be circumspect of the Company’s disclosures.
Most importantly, CRH is a value-destructive transaction that raises multiple red flags regarding management’s ability to allocate capital judiciously. After reviewing the CRH transaction, we do not believe that the current management team is fit to lead Well. Well needs a new board and new management team in place ASAP.
“Fly Me to The Moon[9]” was merely rhetorical! Investors in Well appear to have taken it literally.
Those interested in a quick sound-bite suffice it to say that at Well: EBITDA is NOT EBITDA, Free Cash Flow is NOT Free cash Flow, Insig, Circle Medical and CRH are duds, Digital Technology is mundane, and management is flaky.
Others with patience should follow our complete chain of thought at www.antya.ca/research.
Interesting