Medibank is investing in hospitals. They have given reasons but if you examine them they make no sense. Also, if you know history, you will know that MBF, now bupa did this in the early 90’s for the same stated reasons but exited as it did not work out.
Like too many boards, this board lacks the deep experience or knowledge of the industry that would help prevent repeating mistakes. But even if you did not know about the past, you would wonder how much you have to invest to influence what is a $20 billion industry - just the private hospital part, dominated by a gorilla called Ramsay. The investment will be irrelevant in every way. You will read lots about it for a few years. Then it will be sold off.
MPL Price at posting:
$3.65 Sentiment: Hold Disclosure: Held
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