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Not only is health insurance in the United States a convoluted affair, it’s also incredibly expensive, making it a difficult challenge for many households to acquire. Naturally, some state governments require you to have insurance or risk paying a tax penalty. With choices like that, Oscar Health may be the most welcomed initial public offering (IPO) in recent memory.
Using technology to enliven the anachronistic method that traditional health insurance providers deploy, Oscar Health delivers transparent, budget-friendly services that cater to individual needs without overburdening them with unnecessary costs. As such, this IPO has the potential to truly soar.
When is the Oscar Health IPO Date?
Although management has kept official details tightly guarded, inside anonymous sources revealed that Oscar Health will price its public offering deal on March 2, 2021. Then, in the following day, shares of the company will open for trading for the investing public.
Earlier in February, Oscar Health announced that it filed a Form S-1 registration statement with the U.S. Securities and Exchange Commission in association with its Class A common stock IPO.
Interestingly, this offering coincides with a quiet period in terms of IPOs. Because of the Presidents’ Day holiday in mid-February, bankers and various power brokers were out on vacation, thereby nullifying road shows — pitches to prospective investors to take a chance on a particular business.
Therefore, it’s possible that the Oscar Health IPO may have more eyes on it when it opens to the market.
Oscar Health Financial History
From available information, Oscar Health will offer 31 million shares, ranging in price per share between $32 and $34. Shares will likely trade under the ticker symbol OSCR. If the stock reaches the high point of the estimated price range, Oscar Health could raise just over $1 billion from the IPO.
Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS) and Allen & Co are underwriting the offering.
An interesting factoid is that Josh Kushner, the brother of former President Donald Trump’s son-in-law and former White House advisor, backs this technology-based health insurance and services provider.
Interest in Oscar Health has been strong throughout its 10 private equity funding rounds. However, momentum truly picked up in the second half of the funding campaign, with a combined raise of $1.3 billion. In total, the company secured $1.63 billion in funding.
While enthusiasm reigns supreme, it’s fair to point out that Oscar Health generated net losses of $261.2 million and $406.8 million in 2019 and 2020, respectively, according to its Form S-1. Likely, the COVID-19 pandemic and its associated chaos severely disrupted Oscar Health’s business model.
Oscar Health Potential
While IPOs can be incredibly difficult to decipher and forecast, the potential for Oscar Health to deliver strong returns for early shareholders is quite strong. Actually, the first clue comes from one of Oscar’s rivals.
An insurance firm that incorporates artificial intelligence to cut through the busy work of policy application and distribution, Lemonade (NYSE: LMND) caters to millennials and those seeking convenience and simplicity in their lives, all while enjoying critical coverage.
Fundamentally, Lemonade provides a relevant service and the performance of LMND stock shows. Since the closing price of its first public trading session, shares have gained over 86%.
Second, Oscar Health addresses a critical issue within the American healthcare system. According to the Harvard Gazette, “In 2016, the U.S. spent nearly twice as much on healthcare as other high-income countries, yet had poorer population health outcomes.”
Mainly, the “drivers of higher health care spending in the U.S. are generally high prices — for salaries of physicians and nurses, pharmaceuticals, medical devices and administration.”
Oscar Health addresses the friction point in healthcare by cutting the clutter within the insurance industry, providing coverage plans that specifically cater to patient needs. Moreover, the company leverages the power of connective technology.
For instance, members can speak with a doctor 24/7 at zero cost via Oscar’s Virtual Urgent Care platform. Within 15 minutes, you can receive a diagnosis and get a new prescription or refill — something that’s not imaginable through “analog” means.
Not surprisingly, telehealth is a huge business, with the meteoric ascent of Teladoc Health (NYSE: TDOC) providing ample proof.
How to Buy Oscar Health IPO (OSCR) Stock
Generally speaking, when financial advisors help educate their clients on how to buy stocks, the direction is almost always toward blue-chip companies and growth firms featuring robust financials and a very feasible business narrative.
These investments are known commodities, however, and therefore their risk-reward profile is limited. Yes, they offer stability but that stability often mitigates potential upside. With an IPO, you’re really dealing with the unknown. Even with a successfully initial offering like Lemonade, its share price initially tumbled before gaining positive momentum.
Therefore, volatility risk is something to keep in mind if you’re going to buy the Oscar Health IPO (OSCR) stock.
As you might imagine, only power brokers and those in the know typically have access to IPO stocks at their initial offering price. By the time shares hit Wall Street on their public debut, the price can dramatically escalate. Unless you are one of the investment market’s heavy hitters, chances are, if you want to participate in the OSCR IPO, you must do so with everyone else on the first opening session.
While this may mean that you’ll engage Oscar Health stock at a higher price than the initial offering, the broader interest and relevance of OSCR could alleviate these concerns.
- Pick a brokerage.
Before you take your first step in buying the Oscar Health IPO, you must first select a brokerage to conduct your trades. Fortunately, rising competition in the brokerage industry has standardized many benefits, such as commission-free trading. Therefore, your selection process will come down to your preferences and your investing style.
If you live life on the go, a mobile trading app may work out well for you. Further, options catering toward hands-free investing exist. On the other end, you may wish to trade stocks for a living. If that’s the case, a more robust platform is necessary.
- Decide how many shares you want.
Deciding how many shares of Oscar Health stock you want to acquire is obviously a personal decision, which encompasses issues such as budget size and risk tolerance.
The stock market conducts trades on a share-count basis, however, not on dollar value. To make the conversion, simply take the dollar amount you wish to invest and divide it by the market price of the target stock. Whatever is the whole number is the amount of shares you can purchase for the dollar amount. By the way, some brokerages offer fractional share ownership.
- Choose your order type.
While the investment market offers one of the best mediums to build wealth, be aware of its basic concepts and nuances, including how to acquire shares through order types. Below are the key elements to memorize:
Bid: The bid is the maximum price a buyer is willing to pay for a stock. The bid will always be lower than the ask.
Ask: On the other hand, the ask is the lowest price that a seller will accept. This will always be lower than the bid.
Spread: The difference between the bid and ask price is called the spread. Conceptually, the spread is where market makers earn their living, profiting from the difference between their stock acquisition price and their distribution price to the investor (you).
Limit order: Investors who wish to have full control and transparency over their transactions should use limit orders. They only fulfill at a specific, predetermined price. However, there is no guarantee that the stock will reach said price.
Market order: In contrast, if you wish to execute a trade during normal session hours at the next available price, you should elect a market order. This order type is guaranteed to execute. However, market orders execute at the least favorable price — buy orders on the ask, sell orders on the bid.
Stop-loss order: You only make profits when you cash out. Therefore, to protect your portfolio against downturns, you can choose a stop-loss order, which exits you out of your position at a predetermined price or the next available price, whichever comes first. If a gap between different sessions sees your target stock plummet, you could end up automatically exiting at a much-lower-than-anticipated price.
Stop-limit order: Stop-limit orders prevent the above surprise of a gap-down session by exiting your position only at a predetermined price. Essentially, these are limit orders in reverse (whereas stop-loss orders are market orders in reverse). However, the same limitation applies — there is no guarantee that a stock will hit your predetermined price.
- Execute your trade.
If you want to buy a stock no matter what, the market order is the best approach. Simply enter the number of shares you wish to purchase, select the action type (i.e., buy) and elect the market order.
Best Online Brokers
Below is a list of best brokers for your consideration.
A Health Insurance Rethink
One of the peculiarities of our technologically advanced society is that some sectors receive the benefits of advanced innovations while others languish in anachronism. Healthcare in America is an area that desperately needs improvement. Fortunately, Oscar Health may have the answer, which makes its IPO quite compelling.
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View more information: https://www.benzinga.com/money/how-to-buy-oscar-health-ipo-stock/