SAN FRANCISCO, Jan. 13, 2025 (GLOBE NEWSWIRE) — PACS Group (NYSE: PACS), a nursing home operator that saw its stock soar after its initial public offering in April, has experienced a precipitous decline in recent weeks, losing 70 percent of its market capitalization since early November. The company is now grappling with allegations of deceptive Medicare billing practices, a federal regulatory investigation, delayed financial reporting and a burgeoning investor class-action lawsuit.
Shareholder rights firm Hagens Berman is investigating pending claims alleging PACS and its senior executives violated the U.S. securities laws and urges investors who suffered substantial losses to submit your losses now.
Class Period: Apr. 11, 2024 – Nov. 5, 2024
Lead Plaintiff Deadline: Jan. 13, 2025
Visit: www.hbsslaw.com/investor-fraud/pacs
Contact the Firm Now: PACS@hbsslaw.com
844-916-0895
PACS Swift Rise and Sudden Fall
The company, which operates a network of independently run facilities under the Providence Group banner, offering services ranging from skilled nursing care to assisted and independent living, debuted on the New York Stock Exchange to considerable fanfare, its shares doubling from the $21 offering price within seven months. But the celebratory mood abruptly shifted in early November.
The catalyst for the company’s unraveling came on Nov. 4, when Hindenburg Research, a well-known activist short-selling firm, published a scathing report accusing PACS of a series of improprieties. The report alleged that the company had improperly exploited a Covid-era waiver to access Medicare funds for numerous patients, fabricated patient records to inflate revenue and earnings, and engaged in fraudulent licensing practices to circumvent regulatory oversight.
Market Reaction and Federal Scrutiny
The market reacted swiftly. PACS’s stock price plummeted by more than 27 percent on the day the Hindenburg report was released, erasing nearly $12 in value per share.
The turmoil intensified two days later, on Nov. 6, when PACS disclosed that it had received civil investigative demands from federal authorities regarding its reimbursement and referral practices, a development that appeared to corroborate elements of the Hindenburg report. The company also announced a delay in the release of its third-quarter 2024 financial results, further eroding investor confidence and sending shares down an additional 38 percent, closing at $18.09—below its initial offering price.
PACS Securities Class Action
The fallout from these disclosures has extended beyond the stock market. A securities class-action lawsuit, Manchin v. PACS Group, Inc., et al., No. 24-cv-08636, has been filed in the U.S. District Court for the Southern District of New York. The lawsuit alleges that PACS misled investors by claiming to be successfully executing a “turnaround” strategy to restore profitability to its nursing facilities. The complaint contends that this purported turnaround was, in fact, fueled by the improper acquisition of Medicare benefits for thousands of patients.
Hagens Berman’s Probe
In response, Hagens Berman has launched an investigation into PACS Group’s business practices and disclosures.
“PACS Group’s alleged misuse of Medicare funds and manipulation of patient records raises serious concerns about potential fraud,” said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you invested in PACS Group or have knowledge that may assist the firm’s investigation, submit your losses now »
If you’d like more information and answers to frequently asked questions about the PACS case and our investigation, read more »
Whistleblowers: Persons with non-public information regarding PACS Group should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email PACS@hbsslaw.com.
About Hagens Berman
Hagens Berman is a global plaintiffs’ rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman’s team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
Contact:
Reed Kathrein, 844-916-0895
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