Capybara Research Goes Short On NUTX Stock, Alleges Fraudulent Business Practices

• Capybara stated that Vo allegedly used his position to sign unfavorable contracts with companies that he secretly owned and controlled, and also used Nutex to “steal” millions of dollars from physicians and partner ERs. 
• According to Capybara, at least fourteen medical facilities cut ties with Nutex after physicians made allegations of serious wrongdoing.
• According to the firm, Nutex now faces the risk of contracting or breaking apart.

Capybara Research on Tuesday announced it is short Nutex Health Inc. (NUTX), stating that the company and its CEO defrauded its partners through various schemes.

Following the announcement, NUTX tumbled nearly 22% by Tuesday morning.

Capybara’s Allegations

The allegations span over ten years, the firm said, citing multiple independent sources. More than a dozen Nutex partners, including physicians, medical directors, and board members, have accused Nutex and its CEO and Chairman, Thomas Vo, of wrongdoing, including fraud, embezzlement, and self-dealing, Capybara said.

Vo allegedly used his position to sign unfavorable contracts with companies that he secretly owned and controlled, and also used Nutex to “steal” millions of dollars from physicians and partner ERs, the firm said.

“Vo used the stolen money to fund his personal investments in other medical facilities, which are part of Nutex,” Capybara said in the first part of its report. The firm also highlighted that it will be releasing the second part of the report.

Vo is also Nutex's largest shareholder, in addition to being the firm’s CEO. He has a personal stake in many physician groups that staff Nutex ERs and also in real estate companies that own the ER properties, Capybara said. Nutex controls these physician groups and real estate companies through contractual agreements.

“This web of insider-owned related entities, creates conflicts of interest that are ripe for abuse. The problem is amplified by the fact that Nutex, and therefore Vo, have managerial control of all these related entities, and handle their payments, billing, and accounting,” the firm said.

According to Capybara, at least fourteen medical facilities cut ties with Nutex after physicians made allegations of serious wrongdoing. The company’s reputation is tarnished in its home state of Texas, and it is now looking to expand outside, the firm alleged.

“The company now stands the risk of contracting or breaking apart,” Capybara said. “Nutex is dependent on its partners who own the physician groups and have ownership in the ERs. Nutex cannot operate without them and if the company loses their trust and support, the company will struggle to survive.”

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around NUTX stayed within the ‘extremely bullish’ territory over the past 24 hours, while message volume stayed at ‘extremely high’ levels.

NUTX stock has more than tripled over the past 12 months.  

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