The biggest investor in a Franklin-based hospital chain is giving a much-needed vote of confidence in a company thought to be on the verge of collapse.
The Chinese investment firm Shanda Group disclosed Thursday it's taking a bigger stake in Community Health Systems, even as shares are down 90 percent from their highs a few years ago. Shanda issued a brief statement saying it now owns roughly 24 percent of the company and believes in its management.
Community Health CEO Wayne Smith has spent the last several years selling off dozens of hospitals to pay down an outsized debt load. Smith gave an update to investors at a high-profile J.P. Morgan conference in San Francisco earlier this week.
"When we finish, we will have, I'm not sure what the number will be yet, but theoretically around 100 hospitals that are in significantly improved markets," he said.
At 100 hospitals, Community Health would be half its size when it was — for a time — the largest for-profit hospital chain in the country.
At the investors conference, Smith also told a reporter from Axios that if he knew what he knows now, he would not have bought Florida-based Health Management Associates in 2014. That acquisition makes up a significant share of the company's $14 billion in debt.
"Based on the facts and circumstances at the time, I certainly would do the deal," he said. "Based on a retro view of it, I wouldn't do the deal."
Smith's update on the company's divestiture plans and Shanda's show of support may have fueled one of Community Health's best days on Wall Street in months. Shares spiked at the market open on Thursday and closed up nearly 24 percent for the day.