A dark pool order was detected in EVH stock on January 10, 2020. It’s fairly clear from the chart that institutional trades are finding some interest in the stock after the company announced the acquisition of Passport on December 31, 2019.
The dark pool order seems like it might be a buy order because of how EVH stock immediately went higher following the print but there’s no way to absolutely know for sure.
In a regulatory filing on December 31, 2019, Evolent Health noted that on December 30, University Health Care, Inc., d/b/a Passport Health Plan, Passport Health Solutions, Evolent Health, and Justify Holdings, entered into an amendment to their asset purchase agreement, dated May 28, 2019. Also on December 30, the company consummated the transactions contemplated by the amended asset purchase agreement and acquired substantially all of the assets of Passport related to its Medicaid business for $70.0M in cash, a portion of which was placed into escrow, and the issuance of a 30% equity interest in the buyer to the current owners of Passport.
Piper Jaffray analyst Sean Wieland noted that Evolent Health closed on its deal to acquire a 70% stake in the Passport Health plan for $70M cash, which implies a plan value of $100M. If Passport secures an award in the rebid Kentucky Medicaid contract process, he believes the plan could be worth “significantly more” than Evolent paid, said Wieland. He maintains an Overweight rating on Evolent shares with a price target of $10.15.
Some investors believe that Evolent Health got Passport at an excellent price if Passport gets an award in the Kentucky Medicaid contract. Kentucky Governor Andy Beshear announced that he cancelled and rebidded the state’s Medicaid managed care contracts announced last month by his predecessor. Passport Health, which is in the process of being bought by Evolent Health (EVH), lost its contract, which created media and political pushback as it is a locally based plan financially dependent on Kentucky Medicaid.
Traders are gaming the rebid and betting that Evolent Health will get a spot on the award, or the newly acquired Passport Health will, both of which outcomes should put a bid under EVH stock.
What’s Next? Make Sure To Review This Lesson On Dark Pool Trading!