Tenet Healthcare Shares Plunged: What You Need to Know (THC)

Tenet Healthcare Shares Plunged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of health-care service provider Tenet Healthcare (NYSE: THC ) are doing a fine impression of a dying swan today, falling as much as 20.2% on more than 10 times the average trading volume.

So what: Tenet jumped drastically in January when rival Community Health Systems (NYSE: CYH ) offered to buy the company. Today's freefall comes as Tenet rejects the offer in rather violent fashion, filing lawsuits against Community and generally kicking like a cornered mule.

Now what: Community's shareholders are suffering even more than Tenet's today, as the proposed merger of equals would have created enormous synergies and built an instant mastodon. Market leader SunLink Health Systems (AMEX: SSY ) is the logical winner if this deal falls through, and that stock is naturally soaring today. I think a merger would benefit both Community and Tenet, but some highly qualified members of Tenet's board disagree. If this is a stalling tactic, designed to conjure up a better offer, it's a highly elaborate and risky one.

Interested in more info on Tenet Healthcare? Add it to your watchlist.

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Fool contributor Anders Bylund holds no position in any of the companies discussed here. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is investors writing for investors.

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