Shareholder Files Lawsuit Over Oscar Health IPO
According to a report from Fierce Healthcare, a shareholder has filed a class action lawsuit against Oscar Health. A New York City based health insurance firm, Oscar Health markets itself to consumers as providing flexible plans that offer greater telemedicine services. In March of 2021, Oscar Health raised more than $1 billion from investors in its initial public offering (IPO).
The class action shareholder lawsuit alleges that the company made misleading financial disclosures to investors as part of its billion dollar IPO. In this blog post, our Miami shareholder disputes attorney highlights the allegations raised in the proposed class action shareholder lawsuit filed against the health insurance company.
The Oscar Health IPO was Followed By a Sharp Decline in the Stock Price
The Oscar Health IPO was successful—at least initially. The company raised $1.4 billion from investors when it went public in 2021. However, that initial public offering was then followed by a marked decline in the company’s stock price. The price of the initial public offering was $31.00 per share. A week later, the stock hit its record high price of $35.32 per share. However, it has been gradually declining ever since. The stock price now stands below $6.00 per share—it has dropped by more than 80 percent since the IPO.
Allegations: Stock Price Inflated Due to Misleading Financial Disclosures
In the proposed class action claim, an investor alleges that the Oscar Health IPO price was inflated because the company made misleading financial disclosures and incomplete financial disclosures. More specifically, the investor contends that the health insurance provider—which puts a big emphasis on its telemedicine options—knowingly obfuscated the impact that the COVID-19 pandemic had on its finances. The shareholder contends that the company misled investors about its ongoing costs and likely revenue. For its part, Oscar Health has not provided a public comment on the matter.
The Class Action Shareholder Lawsuit Must Still Be Certified By a Court to Proceed
At this point, the shareholder lawsuit is only a proposed class action claim. For individual shareholders affected by corporate wrongdoing, there are benefits to act as a class. However, a court will only certify a class action lawsuit if certain criteria are met. Beyond the underlying merits of the case, a class action shareholder lawsuit can only be certified if:
- There is such a large number of claim that it would be impractical for all of them to be heard separately; and
- The proposed class members have substantially similar claims.
Once a class action shareholder claim is certified, the lawsuit may proceed to its merits.
Call Our Miami Shareholder Lawyer for Legal Guidance and Support
At Pike & Lustig, LLP, our Miami shareholder rights attorneys are dedicated to providing high level, trustworthy legal representation to clients. If you have any questions about class action shareholder claims related to initial public offerings (IPOs), we can help. Call us now for a confidential consultation. We advise shareholders in Miami, West Palm Beach, and all communities in between.