Oscar is on the IPO market’s mind today, but we’re not talking about the golden boy on the red carpet. Oscar Health (OSCR proposed), the health insurance platform co-founded by Joshua Kushner and Mario Schlosser, filed terms early Monday morning for its IPO of 31 million shares at $32 to $34 each – with estimated proceeds of $1.023 billion, if priced at the mid-point. (Source: S-1/A filing dated Feb. 22, 2021.) Oscar’s pricing date is March 2, 2021, to start trading on Wednesday, March 3rd, on the New York Stock Exchange.
So just like that, the IPO Calendar is back in business after the slim pickings of the short Presidents’ Day holiday week. SPACs dominated last week’s run – and that theme continues this week.
Slam Corp. (SLAMU), whose CEO is A-Rod, also known as Alex Rodriguez, the retired New York Yankees star, is among at least nine special-purpose acquisition companies (SPACs or blank-check companies) expected to be priced this week. (We’ll have more on the SPAC blitz in a moment.)
Roblox in March Mode, Too
Roblox (RLBX proposed) generated some sparks early today by revealing that “on or about March 10, 2021” is when the video game platform expects its Class A common stock to start trading on the NYSE after a direct listing, according to an S-1/A filing dated Feb. 22. The NYSE has approved its Class A common stock for listing, Roblox said in the filing.
To be clear, the Roblox deal is not a traditional IPO. Roblox plans to go public via a direct listing of about 198.2 million shares on the NYSE. Goldman Sachs and Morgan Stanley are the financial advisors.
Roblox pointed out that the sale price of its Class A common stock in 2020 was $6.34, according to the amended prospectus. But that price may not have anything to do with the opening price of Roblox shares of Class A common stock when it starts trading on the NYSE via the direct listing, according to the company’s latest filing with the U.S. Securities and Exchange Commission.
From Ellis Island to InsureTech
Health insurance is personal. That’s why Joshua Kushner and Mario Schlosser named their new tech-driven health insurance company after Joshua’s grandfather. When his grandfather landed at Ellis Island, he was given the name “Oscar” and he stuck with it, according to the founders’ letter in the prospectus from Joshua Kushner, the managing partner of Thrive Capital and the son of real estate mogul Charles Kushner, and Mario Schlosser, the CEO of Oscar Health. When they started the company in 2012, they wanted people to be able to relate to it – so they named it after a real person, they wrote.
Goldman Sachs, Morgan Stanley, Allen & Co., Wells Fargo Securities, BofA Securities and Credit Suisse are the joint book-runners on Oscar Health’s IPO.
Here’s more of the Oscar Health story from the prospectus:
“At Oscar, we make a healthier life accessible and affordable for all. Oscar is the first health insurance company built around a full stack technology platform and a relentless focus on serving our members. We started Oscar over eight years ago to create the kind of health insurance company we would want for ourselves—one that behaves like a doctor in the family, helping us navigate the health care system in our moments of greatest need.”
As of Jan. 31, 2021, Oscar Health served 529,000 members in 291 counties in 18 states. The company sells individual, Small Group and Medicare Advantage health insurance plans.
Oscar Health reported revenue of $1.672 billion and a net loss of $406.83 million for the year ended Dec. 31, 2020, compared with year-end 2019 revenue of $1.041 billion and a net loss of $261.18 million, according to the prospectus.
For the year ended Dec. 31, 2020, Oscar Health reported a Medical Loss Ratio (MLR) of 84.7 percent, the prospectus says. Translation: Oscar Health spent 84.7 cents of every $1 it received in health insurance premiums to pay its members’ insurance claims and provide funding for services that improve health care. The federal Affordable Care Act of 2010 (aka Obamacare) set a Medical Loss Ratio (MLR) standard that requires health insurance companies in the individual, small group and large group markets to spend at least 80 percent to 85 percent of their premium income on medical care and health-care quality improvement, leaving the rest to administration, marketing and profit, according to the National Association of Insurance Commissioners.
SPACs will keep driving in the IPO fast lane, if the talk on Wall Street and the flow of traffic at the SEC’s filing window are any indication. Among six SPACs that some expect to be priced this week – possibly as soon as tonight – are Slam Corp. (SLAMU proposed), a sports-, media-, entertainment- and consumer tech-focused SPAC whose CEO is New York Yankees legend Alex Rodriguez, aka A-Rod, and Arctos NorthStar Acquisition (ANAC.U), a sports-focused SPAC whose chairman is David “Doc” O’Connor, who worked his way up from the mailroom to become a principal partner at Creative Artists Agency (CAA), and who led the founding of CAA Sports.
Sixteen SPACs were priced last week, when the Presidents’ Day holiday cut the number of trading days to four. Bankers raised $3.4 billion from those 16 SPACs. Among the notable SPAC or blank-check deals priced last week:
*Pathfinder Acquisition (PFDRU), whose board of directors includes Steve Young, the former San Francisco ‘49ers star and Pro Football Hall of Famer, raised $300 million, and
*SportsTek Acquisition (SPTKU), whose chairman and co-CEO is the Houston Astros’ former GM Jeff Luhnow, raised $150 million.
The SEC could have used a special HOV lane last week for SPACs, which accounted for 35 out of 45 new filings.
JOANN Inc. (JOAN proposed) was the big household name among the initial IPO filings last week. This IPO will mark the fabrics and crafts retailer’s return to the public markets for the first time since 2011, when it was bought by Leonard Green & Partners, a private equity firm. JOANN, formerly known as Jo-Ann Stores Holdings, Inc., was founded in 1943.
As the week goes along, it’s likely that we will see the IPO Calendar expand for this week and the first week of March as more filings stream in at the SEC.
(For more information about these companies, please click the hyperlinks, which will take you to the IPO profiles on IPOScoop.com.)
(Never trade on proposed symbols. You might wind up owning something on the OTC Bulletin Board.)
Disclosure: Nobody on the IPOScoop.com staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The IPOScoop.com staff does not issue advice, recommendations or opinions.
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