An Oscar Health shareholder has hit the insurer with a proposed class-action suit, alleging it obfuscated the impact of COVID-19 on its finances ahead of its initial public offering.
Oscar went public in March 2021, bringing in $1.4 billion in its stock listing. It has historically struggled to turn a profit and set a goal of reaching profitability in 2023.
In the suit, which was filed late last week in New York district court, shareholder Lorin Carpenter said key information about its performance during the pandemic was omitted from Oscar's filings before the IPO. For one, the registration statement failed to disclose that the company's testing and treatment costs related to COVID-19 were growing.
In addition, Oscar did not tell prospective shareholders that it was on track to feel negative impacts from the extended special enrollment period under the pandemic, according to the lawsuit.
"As a result of defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the company’s securities, plaintiff and other class members have suffered significant losses and damages," according to the suit.
Carpenter believes thousands of shareholders could join the class if the lawsuit moves forward.
Oscar Health had not responded to a request for comment as of publication time.
The suit names top executives at Oscar as well as financial underwriters as defendants.