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The long bull market of the last 10 years has passed by shareholders of Santa Monica-based National Medical Enterprises, who last week-watched their sickly stock stagnate in the low $10-a-share range, about back where it was in 1981, adjusted for splits but not inflation.
Giant hospital chain NME was hammered recently by a front-page Wall Street Journal article, which explored alleged NME misdeeds, particularly in the area of unnecessary patient admissions. Again, questions were raised about NME's board of directors and corporate ethics.
"The article didn't help it (NME) much, although all the problems have been aired for a long time," said Thomas Snow, analyst with the Boston-based Buckingham Research brokerage house.
The article, printed on Jan. 8, a Friday, helped drive down NME to $9.87 share, off 15 percent for the day.
For the week, NME stock was down more than 20 percent--meaning shareholders lost nearly $400 million in the week, on paper. The stock traded for $24 a share last year.
Long the domain of founder and Long Beach native Richard K. Eamer, 64, chairman and chief executive, NME has been savaged by private, federal and state investigations and charges that the corporation fraudulently admitted patients, especially mental cases. Former NME employees have told regulatory agencies that profits were placed before patients, according to the article.
Since the NME scandal broke last year, heads have rolled at the company and the advice of a consultant--Richard Kusserow, former inspector general of the U.S....