Short Report On Health Insurance Innovations Inc (HIIQ)

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Richard Pearson / is out with a shot report on Health Insurance Innovations (HIIQ), stating that the stock will quickly drop by 80% and may face ultimate delisting.  The stock had risen by 7x since November 2016.

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Health Insurance Innovations Inc (HIIQ) insiders continue to publicly tout their own stock and downplay the impact of multiple impending regulatory actions. At the same time they have been aggressively dumping millions of shares, including last week.

Multiple data points have recently emerged indicating that legal penalties from 42 states’ fraud investigations will be $100 million or more.  The stock had recently soared after an anonymous author on VIC had aggressively touted the stock, saying that fraud penalties were likely to only be around $1 million.

In June, Health Insurance Innovations was rejected for a key insurance license in its home state of Florida. As part of their independent background check, Florida regulators had uncovered multiple undisclosed legal actions against HIIQ.  When confronted, HIIQ refused to provide the requested information to the regulator.

HIIQ then wrote an appeal to the regulator, stating that a rejection in Florida would comprise a reporting event to the other states in which HIIQ does business. In HIIQ’s own words, this rejection could trigger a “domino effect” leading to rejections and denials from the other states as well.

Health Insurance Innovations privately noted to the regulator that the impact on its business would be dire. But HIIQ failed to disclose any of this to investors. Instead, insiders dumped $50 million in stock this year.

Health Insurance Innovations has only $25 million in cash.  Craig Hallum has been aggressively pumping the stock, making no mention of the very obvious problems above. Past Hallum promotions included Unipixel (UNXL), Neonode (NEON), TearLab (TEAR), Plug Power (PLUG) and Erikckson Air Crane (EAC).  Each of these stocks has risen by 200-800% during heavy promotion from Hallum.  Once the stock spiked, these companies or their insiders were able to cash out via millions in share sales.  Each of the stocks then imploded by 80-100%. Various SEC investigations, fraud suits and delistings then followed.

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