Shares in Long Term Care operations take a dive

Bloomberg reports that the release of the scathing Canadian Forces report on long term care homes has resulted in shares of Canadian nursing-home operators dropping again Thursday. Premier Doug Ford continued his attack on long-term care homes, threatening to pull licenses of several facilities that are under review by the province, while urging investors to ask hard questions.

“I would expect, as a shareholder, to start holding the CEO and chair accountable,” Ford said at a news conference in Toronto. “Because guess what? We’re going to hold them accountable.”

The government is assuming control of five senior-care homes in the wake of Covid-19 outbreaks. Two them are run by Markham, Ontario-based Sienna Senior Living Inc., which saw its share value dropl another 6.8% Thursday and has lost almost 10% this week.

Extendicare Inc. retreated about 1%. Chartwell Retirement Residences, which says it is Canada’s largest owner and operator of seniors residences, fell 3.2%.

Inspectors are on site today at five care homes hit hardest by the virus, Merrilee Fullerton, the province’s minister of long-term care, said Thursday.

Ford vowed this week to hold an independent inquiry into the province’s long-term care system after theCanadian military report outlined poor treatment of residents. He didn’t rule out taking over operation of the system.

The military report said that at Sienna’s Altamont facility in Toronto, for example, most residents were not receiving three meals a day. Some residents had been bound to their beds for weeks and hadn’t been washed properly.

“With respect to bringing the system entirely under the province, we are skeptical that the Ford government will go down that path long term,” Tal Woolley, an analyst at National Bank Financial, said in a note Wednesday. “Neither left-leaning nor right-leaning governments in the past have shown much interest in taking deeper ownership of the system since it is both capital and cost-intensive.”

Sienna owns and operates 43 long-term care residences across Canada, along with 27 retirement and 13 managed residences, according to the company’s latest presentation. About 56% of its portfolio is government-funded and the rest privately paid.

Sienna Senior’s stock plummeted this year, erasing C$550 million in value. The full story is here.