Bright Health Group, Inc.
|Company Name||Bright Health Group, Inc.|
|Class Period||June 24, 2021 to November 10, 2021|
|Lead Plaintiff Motion Deadline||March 07, 2022|
In June 2021, Bright Health completed its IPO, selling approximately 51 million shares of common stock for $18.00 per share.
On November 11, 2021, Bright Health reported its third quarter financial results, revealing earnings per share (“EPS”) of -$0.48 as calculated under U.S. generally accepted accounting principles (“GAAP”), missing consensus estimates by $0.31. The Company also reported a sharp rise in in the Company’s medical cost ratio (“MCR”), advising investors that its MCR “for the third quarter of 2021 was 103.0%, including a 540 basis point unfavorable impact from COVID-19 related costs and a 900 basis point unfavorable impact primarily from a cumulative reduction in premium revenue due to an inability to capture risk adjustment on newly added lives.”
On this news, Bright Health’s stock fell $2.36, or 32%, to close at $4.94 per share on November 11, 2021, significantly below the IPO price.
The complaint filed in this class action alleges that Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) Bright Health had overstated its post-IPO business and financial prospects; (2) the Company was ill-equipped to handle the impact of COVID-19-related costs; (3) the Company was experiencing a decline in premium revenue because of a failure to capture risk adjustment on newly added lives; (4) all the foregoing was reasonably likely to have a material negative impact on Bright Health's business and financial condition; and (5) as a result, Defendants' positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
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