Oscar Health’s initial IPO price is so high, it makes me want to swear

Among all the hype that Lemonade (IPO), Root (IPO), Metromile (SPAC-led debut) and other insurtech players created last year, it was easy to forget about Oscar health. Now that the company, founded in 2012, has reached the public market, it is looking ahead to one of the primary technology-themed insurance companies. So this morning we are digging into the gap between Oscar Health’s first IPO pricing, hoping to understand how the market is valuing its nonprofit health-insurance venture.

Recall that Oscar Health was valued at about $3.2 billion in March 2018. That datapoint Oscar Health raised hundreds of millions of dollars through the PitchBook (in several enterprise-capital tracking databases, including Crunchbase) but lacks a final personal assessment of our organization. Regardless, Oscar Health is now aiming for a $32 to $34 per share IPO range; we can get our hands dirty. 

Let us get some valuable numbers and then decide if Oscar Health feels cheap or expensive at that price.

Oscar Health’s initial IPO price is so high, it makes me want to swear

Billion-dollar IPO

Oscar Health is looking to harvest about $1.21 billion in its IPO. The company is selling 30,350,920 shares, saving 4,650,000 additional shares for its underwriters. Existing shareholders are selling another 649,080 shares. This means that after the IPO, Oscar Health will have 197,037,445 Class A and B shares or 201,687,445 after calculating the number of shares reserved for its underwriters.
Using a range of $32 to $34 per share for a company, we can determine the minimum value of the company (lower share count, lower end of price range) and $6.86 billion (higher share count, higher end of price range). This is the general IPO valuation of the company. Oscar Health could sell its shares in three separate funds up to $375 million at its IPO price. The company suggests that the “” indication of interest is not an obligation contract or a purchase promise, “so we can ignore it now.