Oscar Health, Inc
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of those who acquired Oscar Health, Inc. (“Oscar” or the “Company”) (NYSE: OSCR) Class A common stock pursuant and/or traceable to the registration statement and prospectus (collectively, the “Registration Statement”) issued in connection with the Company’s March 2021 initial public offering (“IPO” or the “Offering”). Investors have until July 11, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Oscar is a health insurance company purported to be the first such company “built around a full stack technology platform” which will “allow [Oscar] to continue to innovate like a technology company and not a traditional insurer.”
On March 2021, Oscar conducted its IPO, selling 36,391,946 shares of Class A common stock at a price of $39.00 per share.
On November 10, 2021, Oscar disclosed that its third quarter 2021 medical loss ratio (“MLR”) 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. On this news, the price of Oscar shares declined by $4.05 per share, or approximately 24.5%, from $16.52 per share 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.
The lawsuit alleges that, throughout the Class Period, the Registration Statement made false and/or misleading statements and/or failed to disclose that: (1) Oscar was experiencing growing COVID-19 testing and treatment costs; (2) Oscar was experiencing growing net COVID costs; (3) Oscar would be negatively impacted by an unfavorable prior year RADV result relating to 2019 and 2020; (4) Oscar was on track to be negatively impacted by significant SEP membership growth; and (5) as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.