Why Medical Properties Trust shares were under pressure today

While large-scale sales do not necessarily mean that a publicly traded company’s management is abandoning ship, they generally do not inspire investor confidence. The news of such a successful divestment Medical Property Trust (MPW -4.07%) on Thursday, and the resulting selloff sent shares down a little more than 4% of their value.

A director sold a piece of stock

A regulatory filing after the market closed on Wednesday disclosed that Medical Properties Trust director Michael Stewart sold 32,780 shares of its common stock. The price was $5.46 per share and the sale left Stewart with 221,245 shares remaining in the portfolio.

That’s not a massive chunk of the company’s more than 600 million shares currently outstanding, but to anyone it’s a significant stake. This goes double for Stewart as he is a director at the specialty real estate investment trust (REIT).

Medical Properties Trust has had quite a year. Its largest and most troubled tenant, Steward Health Care, filed for Chapter 11 bankruptcy earlier this year. In September, the REIT and Steward reached an agreement to transfer leases to 15 hospitals it had previously operated.

Prior to that, Steward’s struggles had severely hurt its owner’s fundamentals, prompting the REIT to aggressively cut its dividend twice in less than two years.

Time matters

Although the outlook for Medical Properties Trust is now brighter following the deal with Steward, investors still have painful memories of the recent struggles stemming from the two companies’ relationship. In other words, investors still need news to lift their spirits, and a selloff of more than 32,000 shares doesn’t seem to fit the bill.