Editing Babylon Holdings Limited
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== Summary == | |||
Babylon Holdings Limited operates as a digital healthcare company. It offers end-to-end care solution that facilities through its digital health suite, virtual care, in-person medical care, and post-care offerings. The company also provides Babylon Cloud services. It operates in the United Kingdom, the United States, the Asia Pacific, Canada, and internationally. The company was founded in 2013 and is headquartered in London, the United Kingdom. | Babylon Holdings Limited operates as a digital healthcare company. It offers end-to-end care solution that facilities through its digital health suite, virtual care, in-person medical care, and post-care offerings. The company also provides Babylon Cloud services. It operates in the United Kingdom, the United States, the Asia Pacific, Canada, and internationally. The company was founded in 2013 and is headquartered in London, the United Kingdom. | ||
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Babylon is a leading value-based care company with the aim to make high-quality healthcare accessible and affordable to everyone worldwide. Babylon wishes to re-engineer how people engage with healthcare. Aiming to switch the model from reactive to preventative healthcare | Babylon is a leading value-based care company with the aim to make high-quality healthcare accessible and affordable to everyone worldwide. Babylon wishes to re-engineer how people engage with healthcare. Aiming to switch the model from reactive to preventative healthcare | ||
Their company mission is as follows: Global healthcare market has been unable to balance accessibility, quality and affordability. Babylon’s goal is to make high quality healthcare accessible and affordable for everyone | Their company mission is as follows: Global healthcare market has been unable to balance accessibility, quality and affordability. Babylon’s goal is to make high quality healthcare accessible and affordable for everyone. | ||
== Product Offering and Services == | == Product Offering and Services == | ||
'''Business Model''' | '''Business Model''' | ||
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Within their value based care stream, Babylon Health generates revenue from capitation(…) for delivery of services under VBC (….) contracts with US health plans and providers. Revenue from capitation for delivery of services under VBC contracts with US health plans and providers. In their clinical services stream Babylon health works with affiliated providers to deliver medical consultations, on a fee-for-service basis or ffs and capitation fees. This includes per-member-per-month subscription fees for virtual consultations. They also use Software Licensing as another revenue stream through selling a digital suite of products to partners who can provide care through their own medical networks. These three lines of service act as Babylon Health's main revenue streams. Services are funded through a subscription based model, pay-as-you-go, centrally funded initiatives like NHS or as part of health insurance packages. | Within their value based care stream, Babylon Health generates revenue from capitation(…) for delivery of services under VBC (….) contracts with US health plans and providers. Revenue from capitation for delivery of services under VBC contracts with US health plans and providers. In their clinical services stream Babylon health works with affiliated providers to deliver medical consultations, on a fee-for-service basis or ffs and capitation fees. This includes per-member-per-month subscription fees for virtual consultations. They also use Software Licensing as another revenue stream through selling a digital suite of products to partners who can provide care through their own medical networks. These three lines of service act as Babylon Health's main revenue streams. Services are funded through a subscription based model, pay-as-you-go, centrally funded initiatives like NHS or as part of health insurance packages. | ||
'''B2C Products''' | '''B2C Products''' | ||
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Their partnerships with the NHS has been met with some controversy, however. Using new technology to attract patients often attracted younger, healthier individuals who are not as in need of immediate care as their older counter-part. This led a surge of NHS referrals of mostly healthy, young people being transferred to NHS practices when they did not necessarily need that level of care. The over use of the technology from healthier individuals caused unnecessary work for NHS workers and diverted the focus away from older individuals who may not be using the app. | Their partnerships with the NHS has been met with some controversy, however. Using new technology to attract patients often attracted younger, healthier individuals who are not as in need of immediate care as their older counter-part. This led a surge of NHS referrals of mostly healthy, young people being transferred to NHS practices when they did not necessarily need that level of care. The over use of the technology from healthier individuals caused unnecessary work for NHS workers and diverted the focus away from older individuals who may not be using the app. | ||
== Team == | == Team == | ||
== Valuations and Financials == | == Valuations and Financials == | ||
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== Stock Price Timeline and Explanation == | == Stock Price Timeline and Explanation == | ||
Having successfully completed series A, B and C funding, worth $25mn, $60mn and $550mn respectively, in the six years following its birth, Babylon was taken public in the final quarter of 2021. Babylon made the decision to divert from the traditional Investment Bank IPO route and instead chose to look in the direction of SPACs. | [Insert company timeline] | ||
Having successfully completed series A, B and C funding, worth $25mn, $60mn and $550mn respectively, in the six years following its birth, Babylon was taken public in the final quarter of 2021. Babylon made the decision to divert from the traditional Investment Bank IPO route and instead chose to look in the direction of SPACs. | |||
'''Public listing (October 2020)''' | '''Public listing (October 2020)''' | ||
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Ahead of its stock market debut, Babylon was valued at $4.2bn, set to receive $575mn from the merger with the SPAC, Alkuri Global. Typically in SPACs, shareholders have the option to redeem their shares prior to the business combination, for a pro-rata share of the funds in the investment trust. Since the SPAC target company often hasn’t been identified when the SPAC is formed, this procedure incentivises investors who may be worried about risks involved. On the date of the merger, 90% of shareholders chose to redeem their shares despite having all voted to approve the deal. As a result, Babylon was left with just $275mn in cash, $300mn less than originally calculated. To make up for this shortfall, Babylon had to cut staff, cancel two existing NHS contracts early and raise $80mn in additional cash – a disaster. | Ahead of its stock market debut, Babylon was valued at $4.2bn, set to receive $575mn from the merger with the SPAC, Alkuri Global. Typically in SPACs, shareholders have the option to redeem their shares prior to the business combination, for a pro-rata share of the funds in the investment trust. Since the SPAC target company often hasn’t been identified when the SPAC is formed, this procedure incentivises investors who may be worried about risks involved. On the date of the merger, 90% of shareholders chose to redeem their shares despite having all voted to approve the deal. As a result, Babylon was left with just $275mn in cash, $300mn less than originally calculated. To make up for this shortfall, Babylon had to cut staff, cancel two existing NHS contracts early and raise $80mn in additional cash – a disaster. | ||
Shortly after | Shortly after its IPO, the share price of Babylon Holdings LTS, under the ticker BBLN, peaked at $272.50 with a market cap of over $3.5billion. On the day of writing, it sits at $0.0331 with a market cap just under $850k. | ||
'''Omicron Variant (November 2021)''' | '''Omicron Variant (November 2021)''' | ||
Adding to an already tough first month of being public, in November 2021 reports of the new Omicron COVID-19 variant spread around the globe. After a period of hope that the worst of pandemic was over, the stock market rally was stunted by reports of rekindled restrictions | Adding to an already tough first month of being public, in November 2021 reports of the new Omicron COVID-19 variant spread around the globe. After a period of hope that the worst of pandemic was over, the stock market rally was stunted by reports of rekindled restrictions to stop the spread of the new variant. A move that would again lead to economic slowdown, investor risk appetite fell due to the uncertainty towards the near future. This lead to a large collapse in global equities, hitting Babylon as hard as anyone else. | ||
'''Reverse stock split (December 2022)''' | '''Reverse stock split (December 2022)''' | ||
In September 2022, Babylon received notice from the NYSE that it violated rules stating that listed companies must maintain an average closing price of at least $1 a day, over a 30 day consecutive closing period. In response, Babylon decided to issue a | In September 2022, Babylon received notice from the NYSE that it violated rules stating that listed companies must maintain an average closing price of at least $1 a day, over a 30 day consecutive closing period. In response, Babylon decided to issue a reverse stock split that became effective on 15<sup>th</sup> December 2022. By reducing the number of shares outstanding, it was hoped that this would increase the price per share and allow its continued listing on the NYSE. [add share price analysis] | ||
'''Delisting from stock exchange as part of restructuring (May 2023''') | |||
Add stock price response | |||
'''Other factors influencing share price''' | '''Other factors influencing share price''' | ||
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Babylon’s poor stock performance since its first listing in October 2021 can also be put down to the over inflated state of the telemedicine market at the time. During the pandemic, digitisation within the healthcare industry accelerated sharply, driven by the need to access patients who were forced into self-isolation. In a world where a return to pre-covid life seemed only imaginary, the telemedicine industry was in the forefront of investors’ minds, with Matt Hancock even describing Babylon’s services as “revolutionary”. | Babylon’s poor stock performance since its first listing in October 2021 can also be put down to the over inflated state of the telemedicine market at the time. During the pandemic, digitisation within the healthcare industry accelerated sharply, driven by the need to access patients who were forced into self-isolation. In a world where a return to pre-covid life seemed only imaginary, the telemedicine industry was in the forefront of investors’ minds, with Matt Hancock even describing Babylon’s services as “revolutionary”. | ||
However, as the world recovered from the pandemic, the rate of healthcare digitisation slowed as it became less of a pressing concern to many people. Having listed on the NYSE near the peak of this focus, investment into Babylon’s public equity only had room to fall as telemedicine expectations dropped to pre-covid levels. Additionally, the stock market started to peak in October 2021 before a long downward trend, driven | However, as the world recovered from the pandemic, the rate of healthcare digitisation slowed as it became less of a pressing concern to many people. Having listed on the NYSE near the peak of this focus, investment into Babylon’s public equity only had room to fall as telemedicine expectations dropped to pre-covid levels. Additionally, the stock market started to peak in October 2021 before a long downward trend, driven by an extremely volatile geopolitical climate, along with monetary and fiscal contraction in response to soaring inflation. | ||
''Target market not reached'' | ''Target market not reached'' | ||
== Risk == | == Risk == | ||
== ESG == | == ESG == | ||