- Health insurance platform Oscar Health (OSCR) sank for a second straight day Thursday, shedding nearly 8% following what had seemed like a hot IPO when it priced Tuesday evening.
- OSCR traded as low as $32 before closing at $32.07, down 7.8% on the day and 17.8% from its $39 IPO price.
- The stock had already fallen sharply on its first trading day Wednesday to close at $34.80, 10.8% below the initial public offering's price.
- The falloff represents a sharp turnaround for Oscar, which seemed like a “unicorn” IPO just days ago.
- Backed by Josh Kushner, brother of former President Donald Trump’s son in law, Oscar has vowed to disrupt health insurance by combining technology with a direct-to-consumer platform.
- In addition to Kushner’s Thrive Capital, Oscar’s other A-list pre-IPO investors included Alphabet, Fidelity Management & Research LLC, General Catalyst Group, Khosla Ventures, Tiger Global Management and other firms.
- OSCR originally expected its IPO to price at $32 to $34 a share, then boosted that estimate to $36 to $38 amid strong demand. Ultimately, the initial public offering priced even higher than the expected range, coming in at $39.
- However, so-called "insurtechs" are suddenly out of favor.
- In addition to Oscar’s sell-off, renters’ insurer Lemonade (NYSE:LMND) lost some 7% Thursday to close at $95.80. LMND has plunged 49.1% since peaking at $188.30 intraday on Jan. 12.
- Meanwhile, special purpose acquisition company Reinvent Technology Partners Z (NYSE:RTPZ) fell 5.9% to close at $10.45 after cutting a deal to buy homeowners' insurance platform Hippo at a $5B valuation.
- Seeking Alpha contributor Donovan Jones recently did a deep dive into Oscar Health's IPO filing and wrote that "I’m not impressed with OSCR’s results, so I'll pass on it."