This weekend I was doing some DD on IPOC.
When I started I thought IPOC was going to end up being one of my high-conviction stocks, but now I might stay away.
My first big concern is the management team: they might be under investigation. The CEO, Vivek Garipalli, and his partners also own a company that has three hospitals. Apparently, they are accused of embezzling $169 million, and falsifying the books. New Jersey state officials condemned their actions, but haven't yet recommended a criminal investigation. They also have a civil case going.
NJ legislators call for probe of insurance unicorn - MedCity News
Once I read that, I re-read the investor documents with a lot more skepticism.
Now, I don't see anything innovative about the company. The claims about the Clover Assistant, which doctor's use to provide service to patients, just does not sound innovative. They only have 57 thousand members, most of which they probably got through their three hospitals in NJ. From where are they getting Big Data? Medical information is highly protected.
They are overwhelmingly based in NJ. They haven't been able to scale.
I just don't see how they are going to take on the big boys in insurance and health care,which have millions of patients from which to draw data.
They try to position themselves as a tech company, and they use all of the Silicon Valley buzzwords, but if their technology is so advanced, why aren't they planning to sell to all doctors and hospitals? If you can cut doctor's paperwork per patient from 16 minutes down to 5, why aren't you selling your tech?
This might be a decent momentum play, but I don't see a disruptive company.
What am I missing? After all, I am a newb, and I ain't a medical professional.
The management team seems shady. They might leave after the big payday.
I won't be surprised if this acquisition gets cancelled. I can see the shareholders being a bit skeptical.
.
