Oscar Health stumbled out of the gate in its first day of trading Wednesday on the New York Stock Exchange, sinking 10.8% to close at $34.80 after opening at $36.
Oscar’s weak first trading day represented a disappointment for what many had tabbed a “unicorn” IPO. Shares of Oscar (OSCR) fell to as low as $34 a share during the session, down 12.8% from its $39 IPO price.
Oscar estimated in initial IPO paperwork that its shares would sell at $32 to $34 each, then boosted that to $36 to $38. Tuesday evening, the stock’s actual pricing came in even higher at $39 a share. The company also ended up selling 37 million shares to the public vs. the 31 million it originally planned to offer.
The IPO valued Oscar at about $9 billion, compared to just a $6 billion valuation at its last private fundraising in December. But Wednesday’s weak session dropped Oscar’s market cap back to about $7.1 billion.
The New York-based company, founded in 2012 by CEO Mario Schlosser, Joshua Kushner (brother of Donald Trump’s son-in-law Jared Kushner) and Kevin Nazemi (no longer with the company), aims to “disrupt the health-insurance industry” by using a mix of digital technology, provider partnerships and member experience to try to make health insurance pricing clearer for patients while giving doctors more flexible payment models.
Oscar offers Individual & Family, Small Group and Medicare Advantage plans, selling health insurance online in 18 states including California, Texas and Florida, with approximately 529,000 signed up as of January 31, 2021.
In 2020, Oscar totaled $1.67 billion in revenue and $1.04 billion in 2019, with losses of $407 million and $261 million, respectively.
“We have been growing a lot in the last couple of years,” Schlosser told Yahoo Finance prior to Wednesday’s events. “The thesis works, the company works and we want to show it to the world.”
Though with cash in hand and despite being in a crowded sector, Schlosser said there are no current plans for Oscar Health to make acquisitions. “We have a ton of growth ahead of us just organically.”