Is the NIB Holdings Limited (ASX: NHF) share price benefitting from the woes of its arch-rival Medibank Private Ltd (ASX: MPL) this week?
Medibank has certainly had one of the worst weeks in its eight years or so of its public history. The company suffered a well-publicised cyber attack earlier this month which left potentially millions of customers' healthcare data exposed.
Medibank shares went into a trading halt on this news on 13 October and again last week, only returning back to the markets yesterday.
But investors were brutal in their reception of the ASX health insurance provider. Medibank closed at $2.87 a share yesterday, a good 18.2% or so from its pre-halt levels.
The company initially fell again today, down to a new 52-week low of $2.76. However, it has recovered since then and is presently up by 0.70% at $2.89 a share.
So how is the NIB share price reacting to all of this news in its backyard?
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Is the NIB share price benefitting from Medibank's woes?
Well, if you thought NIB shares would be the main beneficiaries of its rivals' woes, you'd be dead wrong. For one, NIB shares are deep in the red today, nursing a loss of 1.6% to $6.65 a share.
But NIB shares have been on the slide for weeks now. In fact, the company began falling dramatically in value from 13 October onwards, around the date the Medibank cyberattack became public knowledge.
However, this could be something of a coincidence. For on that date, NIB shares returned from a trading halt of their own. But this had nothing to do with cybersecurity or Medibank.
As we covered at the time, NIB shares were halted so that the company could conduct a capital raising. NIB ended up raising $135 million to facilitate its expansion plans into the national disability insurance scheme (NDIS). NIB intends to become a Plan Manager with its acquisition of Maple Plan.
So it seems that investors could have been voicing their disapproval of these plans with the share price drops we saw around then. Or else lowering the NIB share price to the $6.90 that the institutional placement took place at.
Either way, it's certainly a raucous period in both Medibank and NIB's histories. But we can conclude that Medibank's share price woes of late don't seem to be benefitting the NIB share price at all.
