Shares of online insurance broker GoHealth surge in market debut

By C Nivedita

July 15 (Reuters) - Shares of GoHealth Inc GOCO.O jumped as much as 25% in their Nasdaq debut on Wednesday, benefiting from a rebound in financial markets after the COVID-19 pandemic slammed the breaks on many listings.

The online health insurance broker raised $913.5 million in an upsized initial public offering (IPO) after pricing its shares at $21 apiece. Shares opened trading at $25, giving the firm a valuation of $7.83 billion.

The firm was previously looking to sell 39.5 million shares, and had marketed a range of $18-$20 per share.

The listing comes 10 months after private equity Centerbridge Partners LP invested in GoHealth, valuing the firm at $1.5 billion.

The Chicago-based company has benefited from the growth in online health insurance business since the passage of the Affordable Care Act in 2010 and offers Medicare plans for senior citizens on its website.

GoHealth's revenue has been growing rapidly and the market has been chasing fast-growth companies, said Jay Ritter, an IPO expert and professor at the University of Florida.

The average first-day return this year for operating company IPOs in the United States has been 41% (excluding REITs, SPACs, and ADRs), the highest for any year since the internet bubble of 1999-2000, Ritter said in an email.

The coronavirus outbreak could benefit GoHealth's business by driving more Americans to buy insurance online, rather than through face-to-face interactions, the company said in its IPO prospectus.

Its peer SelectQuote Inc SLQT.N, which went public in May, was trading nearly 27% higher from its IPO price.

(Reporting by C Nivedita; Editing by Ramakrishnan M. and Arun Koyyur)

((C.Nivedita@thomsonreuters.com; within the U.S. +1 646 223 8780, outside the U.S. +91 80 6182 2626; Twitter: @NivCholayil;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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