Oscar Health, a health insurance company co-founded by Joshua Kushner, raised more than $1 billion in funding in an initial public offering, exceeding the company’s market price range, despite investors’ There is political uncertainty about the future of American healthcare, but investors remain confident about it.
According to a statement, the New York-based company priced its shares at $39 per share on Tuesday, raising approximately $1.4 billion. Calculated based on the total number of outstanding shares, at this price, the Oscar’s market value is $7.9 billion.
Oscar has previously stated that it expects its listed stock price to be between US$32 and US$34, and then increase the range to US$36 to US$38 on Tuesday. The company̵
This move shows that investors are relatively unaffected by the company’s potential unfavorable factors. President Joe Biden has vowed to reform the U.S. healthcare system, and the Supreme Court is considering making a decision on the fate of the “Obafable Care Act,” which is called “Obamacare.” Both may bring major challenges to Oscar’s operating model.
The Oscars were presented by Mario Schlosser and Donald Trump’s daughter Jared Kushner’s brother Joshua Kushner (Joshua Kushner) Co-founded in 2012. The shares owned by Kushner’s venture capital firm Thrive Capital will be valued at $1.3 billion at the issue price and will give it 75.9% of the voting rights.
Oscar claims to be the first health insurance company “built on a full-stack technology platform”, with more than 500,000 paying members and offering its insurance plans in 18 states in the United States.
But the company has been working hard to make a profit. By 2020, it has recorded losses widening to more than 400 million U.S. dollars and revenue of approximately 460 million U.S. dollars, which is lower than the nearly 490 million U.S. dollars in revenue of the previous year.
In the past year, Oscar’s initial public offering (IPO) followed the “Insurtech” group’s debut in several other public markets, which promoted an already strong stock market listing.
Clover Health, which uses data analysis to link seniors with Medicare Advantage plans, merged with a special purpose acquisition company or Spac, which was sponsored by former Facebook executive Chamath Palihapitiya and completed in October with a transaction volume of 3.75 billion US dollars. Lemonade, which sells rent, homeowner and pet health insurance, went public last summer and turned out to be one of the most successful stock market debuts this year.
Oscar is very sensitive to any changes in Obamacare, and Obamacare has been working hard since it was written into law in 2010. According to the prospectus, almost all of the company’s revenue comes from plans subject to the provisions of the Affordable Care Act.
President Joe Biden’s health care plan will leave Obamacare essentially as it is, but will make some adjustments and add a public choice for all Americans. At the same time, the Supreme Court is expected to announce another review of the “Affordable Care Act” in the next few months.
Goldman Sachs, Morgan Stanley and Allen & Co. led the offering.