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Dive Brief:

• Bright Health is in peril of being delisted from the New York Stock Exchange.
• The insurtech, which has dramatically reduced its business amid monetary struggles, obtained a written discover from the NYSE that the corporate will not be in compliance with the continued itemizing normal, as a result of its common closing value was lower than $1 a share for over 30 consecutive days.
• Bright has six months to regain compliance. The Minneapolis-based firm stated Monday it is considering available alternatives to stay on the change, together with a reverse inventory cut up.

Dive Insight:

Bright can regain compliance at any level through the subsequent six months if, on the final buying and selling day of the calendar month, its inventory closed above $1 and had a mean closing value of no less than $1 over the month. If Bright can’t regain compliance, the NYSE will droop and delist its inventory.

If a inventory is delisted, it might probably proceed to commerce over-the-counter, however it’s possible the market might be much less liquid. In 2021, more than 370 stocks were delisted from main U.S. inventory exchanges, in accordance with Stock Analysis.

One measure Bright is contemplating is a reverse inventory cut up. That’s when present shares are consolidated into fewer however extra invaluable shares, boosting an organization’s inventory value. The transfer would must be authorized by Bright’s shareholders at its subsequent annual assembly.

Bright declined to remark for this story.

Bright, which went public in June of final yr, has struggled during the coronavirus pandemic with medical prices. As a results of mounting losses, Bright has shrunk the scale of its enterprise over the previous yr in a bid to succeed in profitability in 2023.

Bright plans to do that partly by specializing in higher-margin companies, together with care supply and supplier enablement enterprise NeueHealth, which supplies care by 180 owned and affiliated clinics and is anticipated to make up a bigger share of Bright’s income sooner or later.

After announcing plans to exit six states within the Affordable Care Act market beginning subsequent yr, Bright in October additional slashed its footprint once more, leaving {the marketplace} completely and winnowing its Medicare Advantage footprint to only California and Florida. Less than a month later, Bright stated it also planned to stop MA operations in Florida.

Bright’s inventory has plunged this yr among the many enterprise cuts, together with leadership overhaul, layoffs and fines from regulators.

Bright reported a net loss of almost $432 million within the first half of 2022. The firm additionally reported a lack of $259 million within the third quarter.

Bright has been utilizing reserve funds to cowl its losses, and advised Florida regulators it had “substantial doubt” it might remain financially viable without outside investment, in accordance with reporting from the Star Tribune.

On its third-quarter earnings name, administration stated they have been taking plenty of steps to shore up its funds. That contains working with state regulators to wind down its ACA and MA companies, which ought to enable Bright to recoup $250 million after it’s paid out the claims due.