Investigation of eHealth, Inc.

eHealth, Inc. (EHTH) Accused of Concealing its Highly Unprofitable Business

On January 22, 2019, eHealth issued a press release announcing its full year 2018 results, touting the Company’s “operational achievements” and its ability “to exceed revenue and EBITDA expectations for 2018.” Contrary to eHealth’s representations, on April 8, 2020, Muddy Waters Research published a report disclosing “eHealth’s highly aggressive accounting masks what we believe is a highly unprofitable business” and that “the key driver of growth since 2018 has been reliance on Direct Response television advertising, which attracts an unprofitable, high churn enrollee.” As a result of its findings, Muddy Waters concluded that ” management is, in our view, running a massive stock promotion.” On this news, eHealth’s stock price fell $12.82, or 12%, to close at $103.20 per share.

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