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Biotech / Medical : Oxford Health Plan (OXHP)

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To: Gene J. Abel who wrote (538)	12/14/1997 10:11:00 AM
From: Terrapin	Read Replies (2) of 2068

Gene, re: "I recommend we all start pursuing the positive OXHP which still controls a huge market." I agree with your take on this situation but want to add that this thread would be less valuable if only positive cheerleading took place. Since I am not an expert on the industry I welcome the negative information so that I may research and evaluate its relevance. That includes such things as an accurate number of shareholder lawsuits and their claims. Speaking of which, has anybody posted the circumstances of managements selling before the crash? What were the percentages of their holdings? Was it within the legal window of trading for options? Was the selling mainly tax-related options selling? Somebody mentioned that the Fortune article hints to this. Since this would be the most likely basis for criminal wrong-doing it is a crucial point (IMHO). I am not concerned with the lawsuits since they will most likely be combined and settled out of court for a small impact on earnings which will only prolong a recovery (again IMO). The next crucial point is the ability of the company to sustain further charges for restructuring or reserves. Mike Burry has lent some valuable analysis to this subject. I believe his conclusion to be honest, well thought out and negative for the company but extremely positive for the thread and something that I will consider in my decision. If the company goes bankrupt all is lost for the small investor. Therefore a balnce sheet analysis is vital for potential buyers. We know that the medicare business will require restructuring and likely a charge. We know that there is a possibility of further charges towards reserves as this quarter clarifies itself. We know that the goverment compensation for claims is decreasing (how much?). Will these factors lead to bankruptcy? On the other hand we have anecdotal evidence of claims being paid quickly and notices sent out on time. Thanks to those who have done this basic research and posted. We have magazine reports that subscribers are NOT migrating to other plans. We have reports that the billing and computer system are repaired and up to date. We have reports of expansion into new markets and focusing on "niche" markets in the form of foreign language services. In other words the "business" is functioning well, the "back-office" is grappling with problems. In my last post I mentioned some negatives for the stock and a left-field buying point of $15. At this point I am asking myself if the management will be found guilty of criminal wrong-doing, if additional charges will drive the company to bankruptcy, if future earnings will be at a level to justify a higher shareprice. Just some thoughts, comments welcome, John ps: I have lost money as well thus far but I have been and likely will continue to average down.

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