When about two months ago, on June 12, I published my Oscar Health Investment Case, I didn’t expect that the report would gain so much traction and that Oscar would become one of the most popular and talked-about retail stocks.
Since publishing the report, the stock has gone on a huge rollercoaster!
Within the first two weeks, the stock had jumped close to 50%, as retail traders piled into what many, including me, saw as a potentially incredibly undervalued stock.
However, the party finished almost as quickly as it started, with the stock now down 35% from that point, trading for the same near $14 stock price as when I published the report.
So, what happened?
The first catalyst was Trump’s One Big Beautiful Bill.
The second catalyst was Oscar reducing the Q2 and full-year 2025 guidance.
Let’s take a deeper look into the situation!
1. One Big Beautiful Bill
2. Updated Guidance
3. Q2 2025 Update
4. Valuation
5. Conclusion
1. One Big Beautiful Bill
On July 4, 2025, Donald Trump signed into law a massive and sweeping tax bill called the One Big Beautiful Bill Act. (BBB)
In my Oscar report, I identified the risk of Obamacare cuts as the most existential risk to the company.
“What does matter is that Oscar is heavily exposed to any changes in the law!
Depending on how severe the cuts are, Oscar could even go bankrupt!
The BBB did many things that will cost the US taxpayer many trillions and will significantly increase the US deficit in the next decade.
I am not going to look at the whole bill, but let’s look at how it affects Oscar:
Medicaid and Medicare cuts
Expiration of enhanced ACA subsidies
End of Auto-enrolment
Stricter income employment requirements
Higher burdens on immigrants
Additional integrity rules
Oscar doesn’t