Home REIT, which invests in accommodation for the homeless, has been targeted by a short-seller in a damning report.
Viceroy Research flagged a number of concerns with the business, including doubts about tenants’ ability to pay rent, the prices Home REIT paid for some of its houses and the structure which determines how much the fund managers receive in fees.
Soon after the report was published, Home REIT issued a response, stating that Viceroy’s claims were “inaccurate and misleading… based on mistaken assumptions, misinformed comments, and disputable allegations”.
Home added: “The report was published without any engagement with the company’s board, investment adviser, or wider advisory team. The company will publish a full and detailed response demonstrating the factual inaccuracies and selective use of information in due course.”
The initial rebuttal failed to restore confidence among investors, with Home REIT shares closing 19.6% down at 62¼p, valuing the business at £470m. That is about £130m less than it was worth on Tuesday evening.
Viceroy has built a 0.82% short position, which equates to a £5m bet that Home’s stock will fall.
