SHAREHOLDER ALERT: Law Firm Pomerantz Reminds Shareholders Who Have Suffered Losses on Their Investment in Oscar Health, Inc. of Class Action and Upcoming Deadline
NEW YORK, June 20, 2022 /PRNewswire/ — Pomerantz LLP announces that a class action lawsuit has been filed against Oscar Health, Inc. (“Oscar” or the “Company”) (NYSE: OSCR) and certain of its officers. The class action, filed in United States District Court for the Southern District of New Yorkand registered under 22-cv-04103, is in the name of a class consisting of all persons and entities other than the defendants who have purchased or otherwise acquired Class A common stock of Oscar pursuant to the registration statement and to the prospectus (collectively, the “Registration Statement”) issued pursuant to the March 2021 initial public offering (“IPO” or the “Offering”). Plaintiff is pursuing claims against under the Securities Act of 1933 (the “Securities Act”).
If you are a shareholder who has purchased or otherwise acquired Class A common stock of Oscar, pursuant to the company’s IPO and/or traceable to such date, you have until July 11, 2022 ask the court to name you as the lead plaintiff for the class. A copy of the complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those applying by email are encouraged to include their mailing address, phone number and number of shares purchased.
[Click here for information about joining the class action]
Oscar is a health insurance company that claims to be the first such company “built around a comprehensive technology platform” that will “enable [Oscar] continue to innovate like a technology company and not like a traditional insurer.”
On March 4, 2021, the Company has filed its prospectus on Form 424B4 with the Securities and Exchange Commission, which forms part of the registration statement. During the IPO, the Company sold 36,391,946 Class A common shares at a price of $39.00 per share. The Company received net proceeds of approximately $1.3 billion of the Offer. Proceeds from the IPO were intended to be used to fully repay outstanding borrowings, including fees and expenses, under Oscar’s term loan facility ($167 million), and the balance of the proceeds was to be used for general corporate purposes.
The complaint alleges that the recording 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 an increase in net COVID costs; (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 adversely affected by the significant growth in Special Enrollment Period (“SEP”); 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.
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. The Society claimed 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 costs and 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 millionan augmentation of $32.1 million Year after year.
On November 10, 2021, Oscar revealed 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 COVID net costs versus 3Q20 net income, 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 millionan augmentation of $133.6 million Year after year.
In a conference call held the same day, Scott Blackleythe company’s chief financial officer said, “We have recognized approximately $20 million risk adjustment expenses 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 RADV headwinds relate to the results of the 2019 audit, which was recently completed.
At this news, Oscar’s stock price plummeted. $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 as low as $5.47 per share, a drop of almost 86% compared to the $39.00 IPO price per share.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Parisand Tel Aviv, is recognized as one of the leading firms in the areas of corporate litigation, securities and antitrust. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues the tradition he established, fighting for the rights of victims of securities fraud, breaches of fiduciary duty and corporate misconduct. The firm recovered numerous multimillion-dollar damages on behalf of class members. See www.pomlaw.com
Robert S. Willoughby
888-476-6529 ext. 7980
SOURCE Pomerantz LLP