Is Newly Listed Bright Health Group Worth Investing In?
Healthcare company Bright Health Group (BHG) saw its stock drop soon after being listed on the New York Stock Exchange. Bright Health plans to use the IPO proceeds to repay outstanding debt, acquire complementary businesses, and pay for other general corporate purposes. Nine banks are underwriting the Bright Health IPO, with JPMorgan Chase and Goldman Sachs acting as lead bookrunners. On Jun. 23, the company sold $51.4 million shares at $18 each, raising about $925 million. Originally, Bright officials were looking to raise $1.3 billion through the sale of 60 million shares. That would have put the companys valuation at over $14 billion if shares were $23. Bright Health opened trading at $18 per share on Jun. 24, which is below the $20$23 the company was originally targeting. By that afternoon, the stock was down to $16.77. BHG is one of several healthcare companies to go public this year  The Minneapolis-based companys market debut comes just as several other healthcare companies have gone public. Earlier in Jun. 2021, Cano Health (CANO) went public through a merger with a SPAC (special purpose acquisition company). In Apr. 2021, Agilon Health (AGL) and Privia Health Group (PRVA) also went public through IPOs. Like Bright Health, many of the healthcare companies that have gone public this year have yet to turn a profit, and few are projecting positive adjusting earnings, Bloomberg reports. Article continues below advertisement  Even though Bright Health reported a 2020 revenue increase of over 330 percent year-over-year, the company has seen net losses every year since it started in 2015. In 2020, the company had a net loss of over $248 million. In 2019, its net loss was over $125 million. Bright Health officials are banking on the promising outlook of the healthcare market, which is expected to reach $4.2 trillion in 2021. Source: Bright Health Care