Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/oscar-health-inc" target="_blank" data-smartkarma-citation="entities:31499:1" rel="noopener">Oscar Health (OSCR US)</a>  stock continued to trade lower and plunged ~58% from its IPO price of $39 per share. Company will release its second quarter results after market on Thursday, August 12, 2021. Currently, Oscar Health shares trade on multiples lower than its peers, such as <a href="https://www.smartkarma.com/entities/clover-health-investments-corp" target="_blank" data-smartkarma-citation="entities:33060:1" rel="noopener">Clover Health Investments Corp (CLOV US)</a> and <a href="https://www.smartkarma.com/entities/bright-health-group-inc" target="_blank" data-smartkarma-citation="entities:33507:1" rel="noopener">Bright Health Group (BHG US)</a> . Oscar Health completed IPO in March and lock-up agreements will expire on the second trading day immediately following the public release of earnings for the second quarter. Assuming stock price of $16.20 per share, Oscar Health has enterprise value (EV) of ~$1.06 billion and ~$2.3 billion of cash, cash equivalents and marketable securities. Keeping this in mind, company has raised a total of ~$1.6 billion from American leading investment and venture capital firms. We believe that Oscar Health is M&amp;A target and may be acquired by large managed healthcare and insurance corporation.

Oscar Health (OSCR US)  stock continued to trade lower and plunged ~58% from its IPO price of $39 per share. Company will release its second quarter results after market on Thursday, August 12, 2021. Currently, Oscar Health shares trade on multiples lower than its peers, such as Clover Health Investments Corp (CLOV US) and Bright Health Group (BHG US) . Oscar Health completed IPO in March and lock-up agreements will expire on the second trading day immediately following the public release of earnings for the second quarter. Assuming stock price of $16.20 per share, Oscar Health has enterprise value (EV) of ~$1.06 billion and ~$2.3 billion of cash, cash equivalents and marketable securities. Keeping this in mind, company has raised a total of ~$1.6 billion from American leading investment and venture capital firms. We believe that Oscar Health is M&amp;A target and may be acquired by large managed healthcare and insurance corporation.

Is Oscar Health M&A Target After The Shares Plunged More Than 50% Below IPO Price?

<a href="https://www.smartkarma.com/entities/oscar-health-inc" target="_blank" data-smartkarma-citation="entities:31499:1" rel="noopener">Oscar Health (OSCR US)</a>  completed its IPO in March and sold to investors ~36.4 million shares of Class A common stock at IPO price of $39.00 per share. Therefore, insurtech unicorn raised net proceeds of $1.3 billion and used a portion of funds to repay ~$153 million of borrowings under the Term Loan Facility. However, Oscar Health shares fell ~43% since IPO and could find the bottom near $22.00 per share. We believe that upcoming IPO of insurtech competitor Bright Health and strong financial results for 1Q CY21 may drive valuation of Oscar Health higher. Company plans to deliver revenue growth and expects direct and assumed policy premiums will be ~$3.1 billion at midpoint for CY21.

Oscar Health (OSCR US)  completed its IPO in March and sold to investors ~36.4 million shares of Class A common stock at IPO price of $39.00 per share. Therefore, insurtech unicorn raised net proceeds of $1.3 billion and used a portion of funds to repay ~$153 million of borrowings under the Term Loan Facility. However, Oscar Health shares fell ~43% since IPO and could find the bottom near $22.00 per share. We believe that upcoming IPO of insurtech competitor Bright Health and strong financial results for 1Q CY21 may drive valuation of Oscar Health higher. Company plans to deliver revenue growth and expects direct and assumed policy premiums will be ~$3.1 billion at midpoint for CY21.

Will Bright Health Upcoming IPO Drive Valuation of Oscar Health Higher?

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Capital Markets

Fullerton Healthcare / Equity Capital Markets

The listing of Fullerton Healthcare has been delayed by the Monetary Authority of Singapore in response to letters  (i.e., hate mail from doctors) questioning the company's business model.  We do not know the contents of these letters nor MAS' view of them, but think the deal will go through after a "tasteful delay".We reached this conclusion based on our experience with similar situations in the US, and the fact that MAS approved the company's debt offering in June.

The listing of Fullerton Healthcare has been delayed by the Monetary Authority of Singapore in response to letters  (i.e., hate mail from doctors) questioning the company's business model.  We do not know the contents of these letters nor MAS' view of them, but think the deal will go through after a "tasteful delay".We reached this conclusion based on our experience with similar situations in the US, and the fact that MAS approved the company's debt offering in June.

Ah, Foreign War Movies............................

M&A Reporting, CTFN

Jonathan Spitzer

M&A Reporting

CTFN

Bringing the marketplace leading coverage of mergers, events, and major corporate actions, CTFN has a team of seasoned reporters from Los Angeles to London, publishing news that advances stories that matter to event-driven investors and deal professionals.

Event-Driven

Growing troubles with the Affordable Care Act’s state exchanges, including the planned departure from multiple states by UnitedHealth Group and Humana and expected double digit increases in annual premiums by the big insurers, are expected to complicate the pending reviews of the two big healthcare mergers being conducted by the Department of Justice and state agencies.

Growing troubles with the Affordable Care Act’s state exchanges, including the planned departure from multiple states by UnitedHealth Group and Humana and expected double digit increases in annual premiums by the big insurers, are expected to complicate the pending reviews of the two big healthcare mergers being conducted by the Department of Justice and state agencies.

Obamacare Problems Complicate Health Insurer Mergers

Accelerating consolidation among health insurers has complicated the regulatory landscape for the Cigna-Anthem and Humana-Aetna mergers, which must pass scrutiny from two separate California agencies, as well as insurance regulators in dozens of other states.

Accelerating consolidation among health insurers has complicated the regulatory landscape for the Cigna-Anthem and Humana-Aetna mergers, which must pass scrutiny from two separate California agencies, as well as insurance regulators in dozens of other states.

California Complicated for Health Insurance Mergers

United States

The Cigna Group operates as an insurance company. The Company offers life, accident, disability, supplemental, medicare, and dental insurance products and services. The Cigna Group serves individuals, families, and businesses worldwide.

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Cigna Group (CI US)

Is Oscar Health M&A Target After The Shares Plunged More Than 50% Below IPO Price?

We believe that investors underestimate technology component in Oscar Health’s valuation and insurtech may be M&A target for large insurance...

Andrei Zakharov

Will Bright Health Upcoming IPO Drive Valuation of Oscar Health Higher?

Oscar Health reduced quota share in 1Q CY21 and we expect GAAP revenue may grow 100%+ y/o/y this year with growing business segments MA, Small...

Andrei Zakharov

Ah, Foreign War Movies............................

The listing of Fullerton Healthcare has been delayed by the Monetary Authority of Singapore in response to letters (i.e., hate mail from doctors)...

Kemp Dolliver, CFA

Obamacare Problems Complicate Health Insurer Mergers

Growing troubles with the Affordable Care Act’s state exchanges, including the planned departure from multiple states by UnitedHealth Group and...

CTFN

California Complicated for Health Insurance Mergers

Accelerating consolidation among health insurers has complicated the regulatory landscape for the Cigna-Anthem and Humana-Aetna mergers, which must...

CTFN

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