Financial flatline
Cash crunch in the healthcare industry
Good morning, wellness warriors. This is your Stock Market Rundown for May 17th, 2024. Thank you so much for reading. Let’s dig in:
TODAY’S TOP STORY: HOSPITALS IN HOCK
Providing healthcare seems like it should be the most profitable business ever. After all, if somebody has a broken leg or an MRSA infection, they’re not really in a position to negotiate, are they?
But despite the fact that medical services are the textbook definition of a necessity, running hospitals is no guarantee of making money. In fact, the largest physician-owned hospital operator in the US just filed for Chapter 11 bankruptcy.Â
Steward Healthcare, which operates 31 hospitals in 8 states, has thirty thousand employees who provide care to more than two million patients annually. It also has a balance sheet more botched than a plastic surgery disaster, millions in overdue rent, and billions in unpaid vendor bills. When your suppliers of speculums and stethoscopes are cutting you off, you’ve got problems.
Steward isn’t the only healthcare system failing worse than a defibrillator in a power outage. There’s been a spike in healthcare bankruptcies in recent years.
Industry experts blame skyrocketing labor costs and decreasing government reimbursement rates. Result: a brutal margin squeeze. Apparently, managing hospital finances is like doing surgery with a butter knife… painful and messy.
SO WHAT ELSE IS GOING ON?
Denny’s is facing a proxy challenge from investors over… pigs. The fast-food chain failed to fulfill its pledge to force pork suppliers to adhere to humane standards. Some shareholders are squealing with anger.
Nothing smells better than profit. Coty, which sells fragrances for top brands like Burberry, Gucci, and Calvin Klein, beat quarterly expectations on strong revenue.
Fuel efficiency? Ferrari isn’t into it. The luxury automaker just introduced two new V12 cars that will boast top speeds of 210 miles per hour and have a six-figure price tag.
BMW says it’ll have a drop in profit for 2024, due to higher R&D expenses. Developing self-driving cars isn’t easy, but eventually your 3 Series will autonomously change lanes, parallel park, and maybe even pick up your groceries. Hopefully it won’t judge you for the Pop-Tarts.
And that's a wrap for the week, friends. Make sure to tune in first thing Monday morning for more from the ever-absurd world of finance. Yours in capitalism, The Axe
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