LifeStance (NASDAQ:LFST) stock is taking a beating on Thursday after Hindenburg Research hit the outpatient mental health services company with a short report.
Hindenburg Research highlights what it considers to be several major problems facing the mental health company. That includes $188 million in losses over the last year, $482 million in debt and upcoming lease payments, as well as a $716 million accumulated deficit.
Adding to all of that, Hindenburg Research slamming LifeStance’s $42.6 million in cash, quarterly spending of $33.7 million and the company’s $42 million in cash payments expected by the end of Q1 2024 to settle litigation.
Here’s a portion of what Hindenburg Research had to say about LifeStance in an X (formerly Twitter) thread today:
“We think executives and backers who have cashed out likely understand what our research has shown: LifeStance is a low margin, unsustainable business operating under a crippling debt load with no cash cushion and no realistic hope of profitability.”
A spokesperson from LifeStance reached out to InvestorPlace with this statement regarding the report:
“Hindenburg’s self-serving short report is designed to mislead investors and is riddled with inaccuracies, including but not limited to its claims about LifeStance’s liquidity. In fact, LifeStance had robust cash flow generation in the recently closed fourth quarter and has strong liquidity to support our growing business. Our dedicated team members work diligently and ethically to expand access to trusted, affordable mental health care to patients in need.”
How This Affects LFST Stock Today
Hindenburg Research taking LifeStance to task brings heavy trading as LFST investors sell their shares. As of this writing, more than 2.3 million shares of the company’s stock have changed hands. That’s already more than double its daily average trading volume of about 1 million shares.
LFST stock is down 6.6% as of Thursday morning and is already down 29.3% since the start of the year.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
