Oak Street Health Tumbles on U.S. Inquiry, Quarterly Loss
(Bloomberg) -- Oak Street Health Inc. tumbled after the operator of a chain of Medicare clinics disclosed that it had received an inquiry from the U.S. Department of Justice and posted a deeper quarterly loss than analysts expected.
The stock fell as much as 22%, the steepest intraday decline on record for Oak Street, which first sold shares to the public last year.
The company said in a filing that it received a civil investigative demand Nov. 1 from the Justice Department looking into whether the company may have violated the False Claims Act.
The U.S. inquiry “requests certain documents and information related to the Company’s relationships with third-party marketing agents and related to the Company’s provision of free transportation to federal health care beneficiaries and requests information and documents related to such matters,” Oak Street said in the filing. The company said that it intends to cooperate but couldn’t predict the outcome of the investigation.
A spokeswoman for Oak Street declined to comment. The Justice Department didn’t immediately respond to requests for comment.
Regulatory filings show that Oak Street’s Chief Executive Officer, Mike Pykosz sold $2.28 million worth of stock on Nov. 2, and Chief Legal Officer Robert Guenthner disposed of shares worth $272,000 on Nov. 4. Both trades were made under pre-arranged trading plans.
The Chicago-based company provides high-touch services for Medicare patients, including free transportation to appointments. It said after the close of trading Monday that it lost 49 cents a share in the third quarter.
©2021 Bloomberg L.P.