GoHealth investors may receive additional information about the case by clicking the link "Submit Your Information" above.
According to the complaint, GoHealth provides an end-to-end health insurance marketplace that specializes in matching consumers with Medicare Advantage plans. GoHealth is organized as a holding company, with GoHealth Holdings, LLC (“GHH”) as its principal asset, which houses its operations. GHH was formerly known as Blizzard Parent, LLC, until it was acquired by the private equity firm Centerbridge Partners, L.P. and its affiliated entities (“Centerbridge”) in September 2019 for $1.1 billion in equity and cash (the “Acquisition”). In connection with the Acquisition, Centerbridge also agreed to pay GoHealth’s selling shareholders up to $275 million worth of additional contingent consideration, to be paid in the form of common and senior preferred earnout units, if GoHealth achieved certain earnings targets in late 2019 and 2020.
On June 19, 2020, just nine months after the Acquisition, GoHealth filed with the SEC a registration statement for the IPO on a Form S-1, which, after two amendments, was declared effective on July 14, 2020 (the “Registration Statement”). On July 16, 2020, GoHealth filed with the SEC a prospectus for the IPO on a Form 424B4, which incorporated and formed part of the Registration Statement. The Registration Statement was used to sell 43.5 million shares of GoHealth Class A common stock to the investing public at a price of $21 per share, generating $913.5 million in gross offering proceeds.
The complaint alleges that statements in the Registration Statement were materially false and misleading when made because they failed to disclose the following adverse facts that existed prior to and at the time of the IPO: (a) the Medicare insurance industry had undergone a period of elevated churn in the first half of 2020 as a result of increased competition, the growth of direct-to-consumer insurance brokers and the occurrence of a special enrollment period; (b) GoHealth suffered from a higher risk of customer churn as a result of its unique business model and limited carrier base; (c) GoHealth suffered from degradations in customer persistency and retention as a result of elevated industry churn, vulnerabilities that arose from GoHealth’s concentrated carrier business model, and GoHealth’s efforts to expand into new geographies, develop new carrier partnerships and worsening product mix; (d) GoHealth had entered into agreements with its external sales agents that provided for a materially worse revenue sharing percentage as compared to historical arrangements (i.e., a 90% level in 2020 versus a relatively low level in 2019), which had substantially decreased the profits that could be generated in GoHealth’s Medicare External segment; and (e) these adverse financial and operational trends were internally projected by GoHealth to continue and worsen following the IPO.
GoHealth’s stock price has declined subsequent to the IPO. By September 15, 2020, GoHealth Class A common stock closed at just $12.53 per share, or over 40% below the $21 per share price investors paid for the stock in the IPO.
If you are a member of the class described above, you may no later than November 20, 2020 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP has not filed a complaint in this matter. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP toll free at 1-844-887-9500 or 1-610-667-7706, or via e-mail at email@example.com. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.
Kessler Topaz Meltzer & Check, LLP
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