Among the stocks tumbling Wednesday—and there are many—is EVH stock. For Evolent Health (NYSE:EVH), it’s not poor earnings reports or weakness in broader markets that are impacting it. For Evolent Health, trouble began after it said it’s taking a majority stake in Passport Health Plan.
Here’s what we know.
EVH Stock: Down, Down, Down
On Wednesday, May 29, Evolent Health, a Virginia-area health care company, said it is acquiring a majority ownership stake in Passport Health Plan, a Louisville Medicaid managed care company. In terms of actual figures, Evolent Health is spending $70 million for a 70% stake in Passport Health Plan.
With the deal, Evolent Health will operate the managed care company with several other owners, which includes the University of Louisville. Evolent also plans to invest additional funds and revive Passport Health’s plan to open a new head office in West Louisville. These plans were suspended back in February due to cost-cuts.
And Evolent Health seems reasonably optimistic about the news: “We strongly believe in Passport’s mission and have been proud to partner with Passport’s leadership team to serve the Commonwealth of Kentucky,” said CEO Frank Williams.
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But not everyone agrees with Mr. Williams. Or, at least, that’s how it looks on the market.
According to Yahoo Finance, as of 1:41 PM EDT, EVH stock is trading at $10.70 on the New York Stock Exchange; this puts EVH stock down 24.44%.
Of course, this is good news for Passport Health Plan, as the Kentucky company has struggled over the last year after the state changed Medicaid payment rates. But the announcement appears to have had a different effect on Evolent Health and subsequently its stock.
Do you think things can turn around for EVH stock, though? Perhaps the market needs a day to digest the news.
Let us know what you think in the comments below!
Featured image: DepositPhotos © scanrail
