LOS ANGELES–(BUSINESS WIRE)–Glancy Prongay & Murray LLP (“GPM”) announces that it has filed a class action lawsuit in the United States District Court for the Southern District of New York captioned Carpenter v. Oscar Health, Inc., et al., Case No. 1:22-cv-03885, on behalf of persons and entities that have purchased or otherwise acquired Oscar Health, Inc. (“Oscar” or the “Company”) (NYSE: OSCR) Common Stock Class A pursuant to 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 ” Offer “). Plaintiff is pursuing claims under sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”).
Investors are hereby informed that they have 60 days from this notice ask the Court to serve as lead plaintiff in this action.
If you have suffered a loss on your Oscar investments or would like to inquire about possible claims to recover your loss under federal securities laws, you may submit your contact information at www.glancylaw.com/cases/oscar -health-inc/. You may also contact Charles H. Linehan, of GPM at 310-201-9150, toll-free at 888-773-9224, or by email at firstname.lastname@example.org or visit our website at www.glancylaw.com for learn more about your rights.
In March 2021, Oscar completed its IPO, selling 36,391,946 shares of Class A common stock at a price of $39.00 per share. The Company received net proceeds of approximately $1.3 billion from the Offering. Proceeds from the IPO were supposed to be used to fully repay outstanding borrowings, including fees and expenses, under Oscar’s term loan facility ($167 million), and the remainder of the product was to be used for general business purposes.
On August 12, 2021, Oscar disclosed that the company’s medical loss ratio (“MLR”) for the second quarter of 2021 was 82.4%, an increase of 2,170 basis points year over year. ‘other. The Society asserted that “[t]MLR increased to 82.4% in 2Q21 from 60.7% in 2Q20, primarily due to significantly lower utilization in 2Q20 due to COVID-19, as well as increased testing and medical costs. COVID-19 treatments and a return to more normalized use in 2Q21.” The company also disclosed that its net loss for the quarter was $73.1 million, up $32.1 million year-over-year.
Then, on November 10, 2021, Oscar disclosed that its third-quarter 2021 MLR increased 920 basis points year-over-year to 99.7%. The company said the increase in MLR was “primarily due to higher net COVID costs relative to 3Q20 net profit, an unfavorable risk adjustment data validation (RADV) outcome from the previous year and the impact of the significant growth in SEP membership”. The company also disclosed that its net loss for the quarter was $212.7 million, up $133.6 million year-over-year.
In a conference call the same day, Scott Blackley, the company’s chief financial officer, said, “We recorded approximately $20 million in risk adjustment expenses this quarter related to our data validation audit. risk adjustment or RADV results. The RADV exercise is atypical this year due to COVID. It spans two years, 2019 and 2020. The majority of RADV headwinds relate to the results of the 2019 audit, which was recently completed.
On this news, Oscar’s stock price fell $4.05 per share, or 24.5%, to close at 12.47 per share on November 11, 2021.
At the start of this action, Oscar stock traded at $5.76 per share, down more than 85% from the IPO price of $39.00 per share.
The lawsuit filed in this class action alleges that the registration statement was materially false and misleading and failed to state: (1) that Oscar was experiencing increased costs for testing and treating COVID-19; (2) that Oscar was experiencing increased net costs from COVID; (3) that Oscar would be adversely affected by an unfavorable prior year risk adjustment data validation (RADV) outcome for 2019 and 2020; (4) that Oscar was about to be negatively affected by the significant growth in SEP membership; and (5) that as a result of the foregoing, defendants’ positive statements about the company’s business, operations and prospects were materially misleading and/or lacked reasonable basis.
Follow us for updates on LinkedIn, Twitteror facebook.
If you purchased or otherwise acquired Oscar securities during the Class Period, you may bring an action in court no later than 60 days from this notice ask the Tribunal to appoint you as the principal plaintiff. To be a member of the Group, you do not have to perform any action at the moment; you can retain the services of a lawyer of your choice or take no action and remain an absent member of the Class. If you would like to know more about this action, or if you have any questions about this announcement or your rights or interests in respect of these matters, please contact Charles Linehan, Esquire, of GPM, 1925 Century Park East, Suite 2100, Los Angeles California 90067 at 310-201-9150, toll free at 888-773-9224, by email at email@example.com, or visit our website at www.glancylaw.com. If requesting by email, please include your mailing address, phone number and number of shares purchased.
This press release may be considered attorney advertising in certain jurisdictions under applicable law and ethics rules.