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Biotech / Medical : Oxford Health Plan (OXHP)
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To: Terrapin who wrote (419)12/9/1997 7:22:00 PM
From: Andreas  Read Replies (1) of 2068
 
John,

I admire your courage. I wish you the best. Frankly, I see another Bre-X, or, as was the case this past week another Molten Metal ("MLTN"). The increased reserves may very well be the beginning. Again, non-disclosure of material facts has occurred. I am rapidly beginning to get to the point where I am convinced that this management is totally inept. These young whippersnappers are beginning to show their true colors. I am also putting feelers out to try and determine whether or not bankruptcy counsel is being or has been sought. I smell a chapter 11. Some of you may find this hard to believe or difficult to digest. But rest assured I smell a rat and it's getting pretty ripe. The drop down to twenties was merely the first volley. Now, we will begin to see just how bad it will get.

As to my earlier point concerning insurance, it appears I have struck a cord. It appears that Oxford may not have the insurance coverage to deal with the massive liabilities which, in all probability, will be realized as a result of class action litigation. Also, in speaking with a colleague of mine, it appears that additional class actions are forthcoming which will extend the class to include shareholders who bought through December of 1997! Why? Due to continual non-disclosure by Oxford of material and relevant facts. This can only result in a bankruptcy filing as salespersons find it virtually impossible to sign up new businesses.

And please remember this. This company has no proprietary asset. The competition can easily step into its shoes and pick up the accounts lost and no-one will miss a heart beat. Oxford is not like a Ford or GM with massive tanagible assets which provide a valuation floor. The book value of Oxford will diminish tremendously as the liabilities are tallied and ultimately disclosed. It's value is in its insurance contracts. As those contracts evaporate so does Oxford.
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