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Oscar Health Tanks After Goldman, Underwriter to Its IPO, Puts a Sell

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By Dhirendra Tripathi

Investing.com – Oscar Health stock (NYSE:OSCR) traded 11% lower Tuesday after Goldman Sachs (NYSE:GS) initiated its coverage of the counter with a ‘sell’ rating, just nine months after it helped the company sell the same shares at $39 apiece.

The Wall Street giant put a tag of $6.50 on the stock. Oscar closed 4% lower Monday at $10.46.

Ironically, Goldman Sachs was the lead underwriter to the healthcare platform’s IPO. The others advising the company included investment banking units of Morgan Stanley (NYSE:MS), Wells Fargo (NYSE:WFC), BofA (NYSE:BAC), Credit Suisse (NYSE:CS) and Allen&Company. The tech-based health insurer raised $1.2 billion via the public offering.

The stock debuted on the NYSE on March 4, below its issue price of $39. It touched its high of $37 twice in that month, to never see that level again.

Like many tech-based platforms, Oscar’s business has continued to burn money while profits stay elusive. Last month, the company reported a loss of around $212 million for July-September, wider by more than two-and-a-half-times from the previous year’s quarter. It has reported losses in each of the three quarters of the year.

More than 130 technology IPOs raised over $60 billion in the U.S. this year, record hauls for both metrics, according to data compiled by Bloomberg. They comprised about a third of the entire IPO market, excluding special purpose acquisition companies and direct listings, the wire agency said.

Recent market volatility has wiped off the gains of most of the IPOs, threatening the prospects of ones likely to hit the market in the coming months.

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