Babylon‘s share price fell sharply after the company announced plans to privatize the multinational digital healthcare company less than two years after it was founded debuted on the New York Stock Exchange.
Babylon also entered into an agreement with AlbaCore Capital LLP for a secured loan facility of up to $34.5 million to support the Company’s delisting plans.
In the first quarter, Babylon reported total revenue of $311.1 million compared to $266.4 million in the first quarter of 2022, primarily due to an increase in value-based care revenue. The company said it derives 60% of its VBC revenue from its commercial replacement product, Ambetter, which provides patients on select health plans with virtual access to a family doctor.
Babylon reported a loss of $63.2 million for the period compared to a loss of $29.1 million in the first quarter of 2022. Total first quarter 2022 earnings included a profit of $78.8 million in connection with Babylon’s IPO.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $45.8 million compared to $82.6 million for the same period last year.
THE BIGGER TREND
In 2021, the company went public through a $4.2 billion SPAC merger with Alkuri Global Acquisition. The company announced this in September get notification from the New York Stock Exchange (NYSE) that it was not a rule requiring companies to maintain an average closing price of at least $1 for 30 consecutive days.
Two months later, Babylon announced this Proceed with a reverse stock split of its Class A common stock, which would be trading on a split-adjusted basis when the NYSE opens on December 16, with the par value of the shares changed to $0.0001 per share. The aim of the split was to increase the share price in order to prevent a delisting.
Earlier this year Ali Parsa, CEO and Founder of Babylon said, sat down with MobiHealthNews and admitted that taking the company public via a SPAC was a mistake.
“We took our shares public on October 21 via a SPAC [special purpose acquisition company]”And we had to go with a SPAC for the very reason you mentioned – we had 400% growth,” Parsa said. “It took us a lot to go down that road and, more importantly, we had almost no US shareholders left.” So you’re on the US New York Stock Exchange and you don’t have a US shareholder base, which is yours stock supported.”