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Dive Brief:
- Bright Health is in danger of being delisted from the New York Stock Exchange.
- The insurtech, which has dramatically scaled back its business amid financial struggles, received a written notice from the NYSE that the company did not meet the continuous listing standard because its average closing price was below $1 per share for more than 30 consecutive days.
- Bright has six months to regain compliance. The Minneapolis-based company said Monday it is considering options to stay on the exchange, including a reverse stock split.
Diving Insights:
Bright can regain compliance at any time during the next six months if, on the last trading day of the calendar month, its shares closed above $1 and had an average closing price of at least $1 throughout the month. If Bright cannot regain compliance, the NYSE will suspend and delist its shares.
If a stock Listed, it may continue to trade over the counter, but it will make the market less liquid. In 2021, more than 370 stocks were delisted from major US stock exchanges, according to Stock Analysis.
One measure Bright considers is a reverse stock split. That’s when the existing shares merge into fewer but more valuable shares, driving up the company’s stock price. The move will need to be approved by Bright’s shareholders at its next annual meeting.
Bright declined to comment for this story.
Bright, which went public in June last year, has struggled with medical costs during the coronavirus pandemic. Due to mounting losses, Bright has been shrinking the size of its business over the past year in an effort to reach profitability by 2023.
Bright plans to do this in part by focusing on higher-margin businesses, including NeueHealth, which provides care through 180 owned and affiliated clinics, a care delivery and provider enablement business.
After announcing plans to exit six states from the Affordable Care Act marketplace starting next year, Bright further trimmed its footprint in October, leaving the marketplace entirely and winning its Medicare Advantage footprint only to California and Florida. Less than a month later, Bright said it also plans to cease MA operations in Florida.
Bright’s stock has fallen this year amid a leadership overhaul, layoffs and business cuts along with fines from regulators.
Rebecca Pifer/Healthcare Dive
Bright reported a net loss of $432 million in the first half of 2022. The company also reported a loss of $259 million in the third quarter.
Bright has used reserve funds to cover its losses and told Florida regulators there was “substantial doubt” it could remain financially viable without outside investment, according to reports in the Star Tribune.
In its third-quarter earnings call, management said it was taking a number of steps to improve its financial position. That includes working with state regulators to wind down its ACA and MA businesses, allowing Bright to recoup $250 million after paying claims.
