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WELL Health CEO says short report was full of misinformation

Hamed Shahbazi

Hamed ShahbaziWELL Health Technologies (WELL Health Technologies Stock Quote, Chart, News, Analysts, Financials TSX:WELL) CEO Hamed Shahbazi says the recent short report on his company was written to mislead investors and that regulators should be clamping down on hedge funds who hire shorters to spread misinformation.

Health tech and primary clinic owner WELL Health was the subject last month of a short attack from Grizzly Reports who called WELL a “toxic roll-up,” claiming the company overpaid for a number of recent acquisitions, including CRH Medical, a US-based gastroenterology business and WELL’s biggest purchase to date at US$372.9 million.

WELL, a $1.4-billion market cap company whose stock shot up by over 400 per cent in 2020, has seen its share price slide in recent months. The stock dropped a percentage point on the day the Grizzly report was released but rose almost 11 per cent on the following trading day.

Below: Cantech Letter’s Justine Ma talks to Hamed Shahbazi in an excerpt from a forthcoming interview…

Shahbazi said in an interview with Cantech Letter on Sunday that the short report contained “gross errors, omissions and factual inaccuracies.”

“It’s basically one of these short-and-distort type of reports. At this point in time it’s definitely not even worth dignifying with a response,” said Shahbazi.

“We’ve had enormous feedback from our shareholders, analysts and investors who commented on their support for the company and the fact that they see this report for what it is, a misleading report designed to manipulate the market for the benefit of people who have short positions on the company,” he said.

The Grizzly piece includes a disclaimer saying the report’s authors have a short position on WELL, that they stand to gain from any drop in WELL’s share price and that the report’s claims are “not statements of fact” but are based on the author(s)’ opinions. At the same time, the disclaimer contends that according to the authors, the information in the report is “accurate and reliable.”

Shahbazi referenced investor and BNN Bloomberg reporter Andrew McCreath who on the day the report came out said he was aware that the report’s authors had been paid by a hedge fund to write the WELL piece. McCreath criticized the practice, saying, “I don’t understand why regulators don’t look at hedge funds hiring people to write short reports.”


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Shahbazi echoed the point, saying, “In our view, regulators should require the short report author to provide their name and credentials and the firm that puts out the short report should disclose who paid them to write the report and whether or not the group paying the researcher is long or short on the stock.”

“It’s a real crime what hedge funds and short sellers have been able to get away with here without regulators stepping in,” he said.

Shabazi said WELL management has not sold any of its stake in the company recently and in fact has been buying more stock through the subscription receipt financing at $9.80 per share which went towards funding the CRH acquisition.

“I’ve personally purchased millions of dollars of stock [in WELL] with my personal funds and I recently purchased $530,000 at $9.80 [per share],” Shahbazi said.

“I think it’s important for people to consider that the people closest to the business, insiders who are seeing the quality of decision making and the quality of the business — they’re the ones supporting the business and are investing in the business,” he said.

Disclaimer: Jayson MacLean and Nick Waddell own shares in WELL Health Technologies and WELL is an annual sponsor of Cantech Letter.

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About The Author /

Jayson is a writer, researcher and educator with a PhD in political philosophy from the University of Ottawa. His interests range from bioethics and innovations in the health sciences to governance, social justice and the history of ideas.
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