Molina Healthcare IPO One of the ‘Best Performing’ This Year
Long Beach-based HMO Molina Healthcare had one of the year's "best performing" initial public stock offerings, with shares rising 14% from $17.50 to $20 per share on Wednesday, the Los Angeles Times reports (Vrana, Los Angeles Times, 7/3). The HMO is one of the nation's largest and most profitable. It serves about 500,000 Medicaid beneficiaries in California and three other states, and its profits rose from $2.6 million in 1998 to $30.5 million last year (California Healthline, 5/5). C. David Molina, an emergency room physician, formed Molina in 1980. Since he died, his sons have run the company; they retain an estimated 40% ownership of the firm. The company has been criticized for "making too much money from government contracts while not doing more in the area of preventive care for its members," the Times reports. However, Molina maintains that its success has been the result of its ability to serve culturally diverse communities. The company raised $107 million in net proceeds during its debut session on the market; company officials say they will use proceeds from stock sales to improve technology and expand business operations (Los Angeles Times, 7/3).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.