Veradigm stock tumbles as strategic review ends without a deal

Investing.com -- Veradigm shares plummeted 40% following the conclusion of a strategic review process that did not result in a sale or other deal. The healthcare data and technology solutions provider, Veradigm (OTCMKTS: MDRX), announced that its Board of Directors, after evaluating various strategic opportunities including a potential sale, decided to end the review without a final proposal from any of the interested parties.

Despite entering confidentiality agreements with over 30 parties and receiving preliminary interest from five bidders, the company did not secure any definitive offers. Greg Garrison, Chairman of the Board, emphasized the board’s commitment to maximizing shareholder value and remaining open to future opportunities that could enhance that value. The announcement also indicated Veradigm’s intent to focus on completing the restatement of its 2022 financial statements, becoming current in financial reporting, and relisting its common stock.

The company has engaged an independent strategic advisory firm to assist in refining its business plan, aiming to identify potential operational improvements and better organizational alignment. These steps are part of Veradigm’s efforts to position itself for profitable growth and long-term success as it continues with a standalone strategy.

In an update regarding its financial situation, Veradigm plans to provide fiscal year 2023 and preliminary fiscal year 2024 estimated financial ranges in mid-March 2025, along with a business and audit update. This forthcoming information is expected to return Veradigm to a regular cadence of investor updates, including financial guidance.

Stephens analyst Jeff Garro has adjusted the company’s price target to $7.00 from the previous $13.00 while maintaining an Equal Weight rating. Garro noted the company’s shift toward a standalone strategy after the strategic review and the hiring of an advisory firm to refine this strategy. He remarked, "Investors are left to guess for 1.5 months, but have to lean toward an assumption of pressures on growth and profitability given the posture." This comment reflects the uncertainty facing investors as they await the company’s next financial update.

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