The complaint alleges that the Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation. Additionally, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, the Offering Documents and Defendants made false and/or misleading statements and/or failed to disclose that: (i) Bright Health had overstated its post-IPO business and financial prospects; (ii) the Company was ill-equipped to handle the impact of COVID-19-related costs; (iii) the Company was experiencing a decline in premium revenue because of a failure to capture risk adjustment on newly added lives; (iv) all the foregoing was reasonably likely to have a material negative impact on Bright Health’s business and financial condition; and (v) as a result, the Offering Documents and Defendants’ public statements throughout the Class Period were materially false and/or misleading and failed to state information required to be stated therein. On November 11, 2021, Bright Health reported its third quarter 2021 results. Among other results, Bright Health reported earnings per share of -$0.48 as calculated under U.S. generally accepted accounting principles, missing consensus estimates by $0.31. Bright Health 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%, which includes 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 price fell $2.36 per share, or 32.33%, to close at $4.94 per share on November 11, 2021. As of the time this Complaint was filed, the price of Bright Health common stock continues to trade below the $18.00 per share Offering price, damaging investors.
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