Seniors Housing Weekly Update - Surprise Management Shake-Up At HCP, Inc.
October 8, 2013
Surprise Management Shake-Up At HCP, Inc.
What a mystery. In a move that shocked investors last week, the HCP board fired long-time CEO Jay Flaherty because they lost confidence in his leadership and leadership style. If so, there are certainly better ways to effect a management change, so we assume there was a major disagreement at the board, and the only way to resolve it was to remove Jay. A few equity analysts believe that something else was going on, despite the board’s repeated denials that another shoe was not going to drop. We’ll see. So, has anything else fundamentally changed at HCP? Probably not, but the news sent the shares down by nearly 7%, which is huge for a large REIT, and they sank to a new 52-week low. Investors have seen a $7 billion loss in market value since May, or a 29% plunge in value, most of it coming on the heels of the recent interest rate increases. But does this additional drop represent a buying opportunity? We’ll ask Jay when we see him in Chicago this week, but I would say yes.