Latest Oscar Health News
Sep 20, 2021
Some of New York’s hottest tech unicorns are struggling to win over Wall Street. Six of the 13 New York-based tech companies to launch initial public offerings this year have lost share value compared to their offering price, Crain’s found. Those public offerings have come as part of a record surge in New York tech firms going public in recent months. The share price for tech-driven insurer Oscar Health was down more than half from the $39 price it debuted on the New York Stock Exchange on March 3, as of market closing Thursday. Real estate brokerage Compass was down about 24% on Thursday from its $18 offer price on the New York Stock Exchange, on April 1. Related Articles Before going public, both companies raised large sums of venture investor dollars to scale up and challenge entrenched industries. Compass reached a private valuation of $6.4 billion and its list of early backers includes SoftBank. Oscar Health raised $1.6 billion in private funding from Google's CapitalG venture firm and Fidelity Investments, among others. Other New York tech companies have gained value since there initial public offerings this year. The share price for cloud-hosting company DigitalOcean has climbed more than 80% from its $47 initial public offering price in March, and food-delivery software company Olo and biometric identification firm Clear Secure have seen their share price grow just under 40% from IPOs in March and June, respectively. An index tracking recent IPOs from research firm Renaissance Capital shows the average share price for companies following an offering is about 6% on the year . But it is not unusual for companies to struggle in the months following an initial public offering. "This is why many investors don't play IPOs," said Nick Colas, co-founder of DataTrek Research. "It takes some time for a company to learn how to communicate with markets and for investors to understand how the story is developing." Before becoming one of the most valuable companies in the world, Facebook bottomed out at an $18 share price five months after its May 2012 initial public offering, a more than 50% discount from its debut. Mark Schwartz, head of the IPO and SPAC capital markets advisory at EY, said that the early market response to a company does matter. "You want to keep your shareholders and investors happy," Schwartz said. "And often, in tech companies especially, employees have significant shareholdings in the company." IPO performance is generally measured by the first 30 to 60 days a company is trading, Schwartz said. After that, the variables increase significantly, such as how the economy as a whole is performing and which sector the company is in. About 80% of U.S. technology companies gained share value one month after their initial public offering, according to EY data, up an average of 27%. Compass declined to comment. On the company’s earnings call in August , CEO Robert Reffkin said a hot housing market had boosted the firm’s second-quarter revenues up 186%, to nearly $2 billion. The company now expects to reach adjusted profitability—before interest and taxes—by next year, ahead of initial projections. Oscar Health did not respond to a request for comment Friday. The company saw its premium collections rise 44% compared to a year earlier in the second quarter , to $838 million, but its operational loss nearly doubled to $72 million. CEO Mario Schlosser said on an earnings call Aug. 12 that its ability to use technology to lower the costs of health insurance is “coming through in the strong results for the first half of 2021.” Here is how New York-based technology firms have fared after an initial public offering, with data by EY and Renaissance Capital. Oscar Health HQ: 75 Varick St.