Headlines of Interest

4 thoughts on “Headlines of Interest”

1. DHCNI DHCNL

   Last MD&A I looked at had the dreaded going concern clause (as in NOT going).

   Here is what management says now;

   “DHC has concluded that the conditions that created the substantial doubt about its ability to continue as a going concern have
   been alleviated as a result of the financing activities described above….that no substantial doubt about its ability to continue as a
   going concern exists as of the date of issuance of DHC’s financial statements, February 26, 2024.”

   Do you believe them?
   What say you?

   Reply

   1. My 2 cents is exactly that NWGG. I have family in the medical business and my sister has dealt with senior housing and nursing home for our mother. I sell a specialty product to the medical field.
      Old M.OB,s are expensive to upgrade with issues like asbestos and government requirements for building codes.
      I dealt with contractors in a prior job.
      REIT’s are similar to the shipping business. The companies with the newer building and best clients are going to do good. It’s expensive to remodel a hospital actually easier to tear it down.
      Big healthcare is putting financial stress on smaller independent hospitals. Everything is moving to campus environment and associated services.
      Owning outdated properties and having financially shaky tenants.
      Best m.o b. Are office parks next to large hospitals where it is easier for corp’s to rent than to build.
      There has been a lot of fallout lately in this reit sector.

      Reply

   2. NWGG – I say that a CFO had to do some mighty fancy dancing (and maybe some begging, possibly some other “enticements” were involved) to get the outside auditor to take back a “going concern” warning. We have advised companies over the years on both sides of the warning. Not easy to get it lifted.

      Auditors are terrified of signing off on a company, then having it fail (hence they require the going concern warning).

      One of the very first messes I worked on involved Ernst & Whinney giving a clean bill of health to a bank in the Caribbean, only to have it fail a couple of weeks later. Lawsuits went on for years.

      Auditors are even more terrified of lifting the warning, THEN having the company fail, so (my experience) they want to see “more” to lift the warning than they would have accepted not to require the warning in the first place.

      Disclosure: I don”t know anything about DHC specifically and I have never owned their securities.

      Reply

      1. @Private

         Always like to hear the stories. Never gets old.

         Yeah the old GC is usually right before the kill shot.

         However, the auditor did a “Frankenstein Moonwalk” to magically reverse the GC. 🙂

         Reply