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I think last week, the stock was down another 30% or so. I think those are either some of those insiders I just mentioned, or these banks to which they had hypothecated shares dumping. This is an example of how when we create scrutiny on a company, then these things that they're not supposed to be doing, all of this, looks like there's a tremendous amount of debt. This might be debt that sits at NMC that's not disclosed, which we hypothesized that that exists, or this could be debt within a web of companies that are controlled by these individuals that are transacting with NMC, and through these debt fueled transactions, they're able to improperly inflate NMC's margins.
I think it's one or both of those things that are going on, but it's unraveling. It looks like they tried to plant rumors yesterday about a fake bid from KKR. The best part about that is KKR came out today and actually announced that they had never made a proposal, and they will not be making a proposal to buy NMC. It's a situation that we could not have predicted at the beginning what would be happening at this point. If you asked me, whether this is a possibility, and so far, the independent directors and we did question their independence and I think that they don't really want to act independently, but I think they're in a situation now where they have to look for scapegoats and so I think they're throwing these three under the bus because they announced yesterday also that those three are suspended for the time being from board deliberations.
I couldn't have, wouldn't have predicted this. That's the point, with a short activist campaign, you're trying to knock over dominoes and you don't know how many dominoes or which dominoes are going to fall but again, by putting the scrutiny on the company, things can break in. I think that's what we're seeing here with NMC.
What kind of company do you look to short?
There are two fairly recent examples that come to mind but I'll stick with one since that's what I was asked for. In December, we shorted a FTSE 100 company called NMC Health. NMC Health is an owner operator of health care facilities in the Middle East, especially the UAE. When we looked at NMC, we found that there were transactions where assets were purchased from insiders at what we believe are substantially inflated values. We think that the cash balances are overstated. We think it has undisclosed debt.
We think that this is a company that is significantly rotten, and I wrote in the report, we don't know how
deep the rot goes. This was December 17 , and the last couple of weeks of the year, we're pretty quiet because of Western holidays, but the new year started off with a bang, where you have these three main shareholders. Two of them are related to one another. They've been booties and they're local Emiratis and then the founder of NMC, a 77-year-old named B. R. Shetty.
The year started off with Shetty and booties having to do a placement of several hundred million dollars' worth of stock. This is after the stock had come off quite a bit. I think it was down at that point about 45% from the closing price right before we published. It was at 14 pounds, and they announced that they were going to do a placement overnight at 12 pounds. An almost 20% discount, so it dropped some more and then there were announcements of stock pledges that hadn't been disclosed before by these three.
Then yesterday, there was an announcement that Shetty and the booties had disagreements and they weren't sure who really owned what shares but maybe the booties owned a significant chunk of Shetty's shares, but those are pledged and those have been moved from this private bank to that one to another bank. We see this thing. This follows a period of significant selling like last week, the stock just almost every day, was selling off hard.