PolyMedica drops following NYSE listing flipflop
NEW YORK (Reuters) - Shares of PolyMedica Corp. , the nation's largest distributor of diabetes-testing
supplies to the elderly, fell sharply Monday on worries about why the New York Stock Exchange unexpectedly
last week decided not to list the stock, analysts said.
The Woburn, Massachusetts, company, which sells diabetes-testing products under the Liberty Medical brand,
remains listed on the Nasdaq stock exchange.
The stock was down $12.82, or 27 percent, at $34.71 in afternoon Nasdaq activity, despite the company's
announcement earlier Monday that its fiscal first-quarter profits will beat Wall Street forecasts. It plans to report
the results Tuesday.
PolyMedica said late Friday that the New York Stock Exchange, which had planned to list its shares beginning
Monday, had suddenly reversed its decision without giving a reason.
The company said the Big Board would be willing to consider a new application from PolyMedica for a listing.
A New York Stock Exchange spokesman told Reuters Monday that the exchange could not comment on the
matter.
PolyMedica has said complaints from some customers were filed with the U.S. Department of Health and
Human Services in 1999 about its billings to Medicaid and Medicare for medical products.
The report cited complaints by some customers that PolyMedica's Liberty Medical Supply unit billed for
products that were not supplied or were returned, delivered products that were not ordered, or sent more
products than were necessary.
PolyMedica has also verified that the FBI is conducting an inquiry on behalf of Medicare and that the company
has made some reimbursements to the federal insurance program for products returned by elderly customers.
Adams, Harkness & Hill Inc. analyst Ryan Rauch said investors, anticipating PolyMedica will be accused of
Medicare fraud for its billing practices, have shorted a majority of the stock.
"The reason the stock is down today is because it was not listed on the New York Stock Exchange," said Rauch,
who also cited the assumption by some investors that the exchange had uncovered negative information about
PolyMedica.
He said he recommends the stock and does not believe the company will be cited for Medicare fraud.
PolyMedica spokeswoman Sylvia Dresner said she could not provide details about the FBI queries and
Medicare billings.
The company said Monday it will report revenues of $63 million and earnings of 65 cents a diluted share for the
first quarter ended June 30. These results exceed its previous forecast of $62 million in revenues and
earnings-per-share of 63 cents.
Analysts polled by research firm Thomson Financial/First Call have on average estimated a profit of 63 cents
per share for the period. |
