The IPO Buzz: Oscar Time

Oscar Health (OSCR proposed) raised its price range early today to $36 to $38, up 12 percent from its initial range of $32 to $34, just ahead of its pricing tonight for a Wednesday debut on the New York Stock Exchange. The number of shares remained the same at 31 million. (Source: S-1/A filing dated March 2, 2021.) If priced at the mid-point of its new range, Oscar Health would raise about $1.147 billion. An increase in price range typically indicates strong demand for a deal, as the Wall Street adage goes: “Increase a deal. Double my order.” But in Oscar’s case, that must be tempered with the fact that the books closed yesterday afternoon.

Goldman Sachs, Morgan Stanley, Allen & Co., Wells Fargo Securities, BofA Securities and Credit Suisse are the joint book-runners.

Alphabet, Google’s parent, is the largest shareholder before the IPO – and it will retain that status after the offering.

Oscar Health is the first health insurance company built around a full-stack technology platform. The company, founded in 2012 by Joshua Kushner and Mario Schlosser, provides individual and family health insurance plans, Small Group (small business) plans and Medicare Advantage plans. As of Jan. 31, 2021, Oscar Health served 529,000 members in 291 counties in 18 states. The company reported $1.67 billion in revenue and a net loss of $406.3 million for the year ended Dec. 31, 2020, compared with 2019, when its revenue was $1.04 billion and its net loss was $261.2 million.

“It’s in the right space, and Lemonade (LMND) comes to mind,” a seasoned trader says.

Meanwhile, the books close this afternoon for InnovAge Holdings (INNV proposed), a leading healthcare delivery platform that provides in-home healthcare and community center health services for senior citizens (age 55 and up) who are eligible for both Medicaid and Medicare. The objective is to keep senior citizens in their homes as long as possible and provide healthcare services at a much lower cost than in nursing homes. The company receives payments through direct contracts with Medicaid and Medicare.

The IPO’s proceeds will go to repay debt owed to the two private equity firms – Apax Partners and Welsh, Carson, Anderson and Stowe – that will own 87 percent of InnovAge Holdings after the offering, according to the prospectus.

“I’m going to play both because healthcare is a big part of the economy,” an individual investor told IPOScoop, referring to both Oscar Health and InnovAge Holdings.

The month of March began with the roar of the SPACs, with 14 deals priced Monday night. Some see that volume – and the weak performance of a few SPACs that began trading today – as a sign that the SPAC gold rush is losing steam.

As the week continues, more IPOs – and more SPACs – are likely to land on the IPO Calendar, though, as the filings continue to flow into the U.S. Securities and Exchange Commission.

Stay tuned.

(For more information about these companies, please click the hyperlinks, which will take you to the IPO profiles on IPOScoop.com.)

(Never trade on proposed symbols. You might wind up owning something on the OTC Bulletin Board.)

Disclosure: Nobody on the IPOScoop.com staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The IPOScoop.com staff does not issue advice, recommendations or opinions.

Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums), is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with IPOScoop.com. The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.