The Kolmogorov IPO Score for 1Life Healthcare, Inc (aka One Medical)

Our initial success prediction for the One Medical IPO!

Last week 1Life Healthcare Inc (aka One Medical) filled for an IPO and they highlighted technology as being one of their advantages:

“Our ability to simultaneously deliver significant value to key stakeholders is deeply rooted in our purpose-built, modernized technology platform. Our proprietary technology platform powers all aspects of our company: engaging members, supporting providers and advancing business objectives. Our technology allows us to proactively engage members with personalized clinical outreach and improve health through online scheduling, virtual provider visits and ready access to health information. This has resulted in a highly engaged member base, where 47% of our members interacted with us online monthly during the nine months ended September 30, 2019. Our platform is built on a modern cloud-based technology stack, employing Agile development cycles and a DevOps approach to infrastructure. Our modular, service-oriented architecture utilizes application program interface, or API, standards for ease of implementing new functionalities and integrating with external systems. Our technology platform and capabilities were key contributors to our recognition on Fast Company’s “Most Innovative Companies” list for 2019, placement on CB Insights’ “Digital Health 150” list in 2019 and ranking by Alliance Bernstein as its number one “Most Disruptive” private health care company in the United States in 2019.” - Extracts from the S-1 filling

What do our investor sentiment signals tell us?

One Medical is actually not part of our pre-selection list of 246 technology-driven unicorns that we’ll be closely monitoring. However, we decided to take on the challenge of applying the investor sentiment analysis to stress-test our mathematical models against companies where we have limited profiling data such as with One Medical.

As a reminder, we theorize that our Kolmogorov IPO Score (see our previous post) is a proxy answer to the chances of an IPO succeeding i.e. the Kolmogorov IPO Score corresponds to the probability of an IPO being successful. Here N = 1 because One Medical is the only company under consideration in this analysis - unfortunately the exact value of K > 1 for this analysis or how it is chosen is something that we cannot share to protect our company from potential reverse engineering attacks by competitors. Moreover, we are happy to share that our success prediction analysis for One Medical is based on the following assumptions:

50/50 investor profile - we set the composition of the K investors to be a 50/50 split between growth investors & value investors i.e. 50% are of a growth investor profile type and 50% are a value investor type of profile. Also, since One Medical is going to be listed on Nasdaq, we factored certain Nasdaq specific signals.

The Kolmogorov IPO Score for One Medical as of today (Jan 8 2020) based on signals gathered over the past few days is 24%. So according to our prediction, One Medical has a 24% probability of success and thus its IPO appears to, unfortunately, be heading for failure if the prediction based on current signals is correct!

Of course, it is possible this prediction will change to a more positive outlook as we capture more data over the coming days and weeks. It is also possible that under one particular type of investor profile, the company may score higher or lower - subscribers to any of the plans of our Pre-IPO Analyzer Service will get prediction updates for One Medical on a regular basis.

Finally, please recall that we don’t consider first-day stock surge as 'success’ - instead, the ability of the company to maintain a strong stock performance till the lockup period expires is what we consider as being a successful IPO from the perspective of existing shareholders like VCs. This is very important as we have seen companies make stellar debuts, with their stocks skyrocketing on the first day of trading, only to see a couple of weeks later the stocks sinking to a record low just before the lockup period expires!

“The applications of probability theory can be put on a uniform basis. It is always a matter of consequences of hypotheses about the impossibility of reducing in one way or another the complexity of the descriptions of the objects in question. Naturally this approach to the matter does not prevent the development of probability theory as a branch of mathematics being a special case of general measure theory.

The concepts of information theory as applied to infinite sequences give rise to very interesting investigations, which, without being indispensable as a basis of probability theory, can acquire a certain value in investigation of the algorithmic side of mathematics as a whole.” Andrey Kolmogorov (1983).

Disclaimer: Any opinions, newsletters, research, analyses, prices, projections or other information offered by Kähler AI is provided as general market commentary, and does not constitute investment advice. Kähler AI will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.  ZAIKU GROUP LTD.