SAN DIEGO, May 24, 2022 (GLOBE NEWSWIRE) — The Class: Shareholder rights law firm Robbins LLP reminds stockholders that a shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired Oscar Health, Inc. (NYSE: OSCR) securities pursuant to the Company’s March 2021 initial public offering (“IPO”). The complaint alleges violations of the Securities Act of 1933. Oscar Health is a health insurance company that claims to be the first company “built around a full stack technology platform.”
If you would like more information about Oscar Health, Inc.’s misconduct, click here.
What is this Case About: Oscar Health, Inc. (OSCR) Misled Investors in its Registration Statement Supporting its IPO
According to the complaint, in its IPO, the Company sold its Class A common stock at $39.00 per share, and received approximately $1.3 billion in net proceeds. The Registration Statement filed in connection with the IPO was materially false and misleading. Specifically, it omitted to state that Oscar was experiencing growing COVID-19 testing and treatment costs as well as growing net COVID-19 costs. Further, Oscar would be negatively impacted by an unfavorable prior year Risk Adjustment Data Validation (RADV) result relating to 2019 and 2020, and was on track to be negatively impacted by significant Special Enrollment Period (SEP) membership growth.
On November 10, 2021, Oscar disclosed that its third quarter 2021 Medical Loss Ration increased 920 basis points year-over-year, to 99.7%. The Company claimed that the MLR increase was “primarily driven by higher net COVID costs as compared to the net benefit in 3Q20, an unfavorable prior year Risk Adjustment Data Validation (RADV) result, and the impact of significant SEP membership growth.” The Company also disclosed that its net loss for the quarter was $212.7 million, an increase of $133.6 million year-over-year. During a conference call held the same day, Scott Blackley, the Company’s Chief Financial Officer, stated: “We recognized approximately $20 million of risk adjustment expense this quarter related to our risk adjustment data validation audit or RADV results. The RADV exercise is atypical this year due to COVID. It spans two years, 2019 and 2020. The majority of the RADV headwinds relate to the 2019 audit results, which were recently completed.”
On this news, Oscar’s share price fell $4.05 per share, or 24.5%, to close at 12.47 per share on November 11, 2021. By the commencement of this action, Oscar stock has traded as low as $5.76 per share, a more than 85% decline from the $39.00 per share IPO price.
Next Steps: If you acquired shares of Oscar Health, Inc. (OSCR) pursuant to the Company’s March 2021 IPO, you have until July 11, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
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About Robbins LLP: A recognized leader in shareholder rights litigation, the attorneys and staff of Robbins LLP have been dedicated to helping shareholders recover losses, improve corporate governance structures, and hold company executives accountable for their wrongdoing since 2002. To be notified if a class action against Oscar Health, Inc. settles or to receive free alerts when corporate executives engage in wrongdoing, sign up for Stock Watch today.
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