Hindenburg Research short Lifestance, says cash needed ‘imminently’

LifeStance trades at about a 23% premium to its peers in the behavioral health industry, despite Hindenburg Research’s view that LifeStance will need to raise cash “imminently” given its latest Q3 results showing its “razor-thin cash balance” of $42.6M, quarterly cash burn of $33.7M and $42M in expected cash payments by the end of Q1 ’24 to settle litigation alleging that LifeStance misled IPO investors. The firm, which says it is short LifeStance in a newly-published report, contends that LifeStance is “a classic example of what happens when private equity meets a ‘hot’ healthcare sector: Massive debt fueling a grinding, metric-focused corporate culture resulting in worse quality of care for patients, a worse environment for clinicians and long-term losses for the average investor.”