In addition to using aggressive modeling assumptions, they misleadingly downplay the need for ongoing service and retention. You represent that you have sufficient investment sophistication to critically assess the information, analysis and opinion on this website. To the best of the applicable Muddy Waters Entity’s ability and belief, all information contained herein is accurate and reliable, and has been obtained from public sources that the applicable Muddy Waters Entity believe to be accurate and reliable, and who are not insiders or connected persons of the Covered Issuers or who may otherwise owe a fiduciary duty, duty of confidentiality or any other duty to the Covered Issuer (directly or indirectly). Based on variable costs alone, we estimate that EHTH will lose approximately -$135 from each MA member it enrolled in 2019. Use of Muddy Waters Research reports is limited by the Terms of Use on its website, which are as follows. Neither Muddy Waters Research nor Muddy Waters Capital will update any report or information on its website to reflect changes in positions that may be held by a Muddy Waters Related Person. Muddy Waters Research is an online research publication that produces due diligence-based reports on publicly traded securities, and Muddy Waters Capital LLC is an investment adviser registered with the U.S. Securities and Exchange Commission. You (or any person you are acting as agent for) agree to hold harmless Muddy Waters Research, Muddy Waters Capital and its affiliates and related parties, including, but not limited to any principals, officers, directors, employees, members, clients, investors, consultants and agents (collectively, the “Muddy Waters Related Persons”) for any direct or indirect losses (including trading losses) attributable to any information on this website or in a research report. EHTH’s highly aggressive accounting masks what we believe is a significantly unprofitable business. Management also manipulates its presentation of churn to be misleadingly low. The reports are the property of the applicable Muddy Waters Entity that published that report. In no event shall Muddy Waters Research, Muddy Waters Capital or any Muddy Waters Related Persons be liable for any claims, losses, costs or damages of any kind, including direct, indirect, punitive, exemplary, incidental, special or, consequential damages, arising out of or in any way connected with any information on this website. After ASC 606 went into effect, member churn immediately skyrocketed. If you access this website, download or receive the contents of reports or other materials on this website on your own behalf, you agree to and shall be bound by these Terms of Use. Muddy Waters Research is affiliated with Muddy Waters Capital. We conclude that the key driver of growth since 2018 has been EHTH’s reliance on Direct Response television advertising, which attracts an unprofitable, high churn enrollee. Due diligence-based equity research on Chinese companies. Each report specifies the publisher and owner of that report. If you are in the United Kingdom, you confirm that you are accessing research and materials as or on behalf of: (a) an investment professional falling within Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “FPO”); or (b) high net worth entity falling within Article 49 of the FPO (each a “Permitted Recipient”). Sign up for our mailing list and receive research reports and other related news and updates from Muddy Waters Research. Sorry, your blog cannot share posts by email. Under no circumstances should any of these reports or any information herein be construed as investment advice, or as an offer to sell or the solicitation of an offer to buy any securities or other financial instruments. With tail revenue adjustments, EHTH’s collection period seemingly extends to 20 years. We adjust 2019 revenue down by $128 million or 25%. We estimate that – prior to any tail revenue adjustment – it takes EHTH nine years to fully collect each dollar of Medicare Advantage revenue it books. Reports are based on generally available information, field research, inferences and deductions through the applicable Muddy Waters Entity’s due diligence and analytical process. We refer to Muddy Waters Research and Muddy Waters Capital collectively as “Muddy Waters” and individually these entities are referred to as a “Muddy Waters Entity”. You knowingly and independently agree to submit to the personal and exclusive jurisdiction of the state and federal courts located in San Francisco, California and waive your right to any other jurisdiction or applicable law, given that Muddy Waters Research and its affiliates are based in San Francisco, California. Based on variable costs alone, we estimate that EHTH will lose approximately -$135 from each MA member it enrolled in 2019. Sign up for our mailing list and receive research reports and other related news and updates from Muddy Waters Research. Block on CNBC’s Squawk Box Discussing Latest Short, eHealth Inc. Block on CNBC’s Squawk Box discussing MW's latest short, eHealth Inc. Watch the full interview here… You accept all risks in relying on the information on this website. Copyright © 2020 Muddy Waters Research, All Rights Reserved. In relation to the United Kingdom, the research and materials on this website are being issued only to, and are directed only at, persons who are Permitted Recipients and, without prejudice to any other restrictions or warnings set out in these Terms of Use, persons who are not Permitted Recipients must not act or rely on the information contained in any of the research or materials on this website. Muddy Waters Research in a new report note they are short eHealth (NASDAQ: EHTH), noting they believe it to be a stock promotion with an unprofitable business … If you have obtained research published by Muddy Waters Research or Muddy Waters Capital in any manner other than by download from that link, you may not read such research without going to that link and agreeing to the Terms of Use. EHTH appears to be booking multi-year “tail” revenue at the end of each cohort’s estimated life, which is extremely aggressive in light of the significantly elevated churn. Subscribe Now eHealth Inc. eHealth Inc. EHTH: Booking Revenues Today that it Will Collect in 2029 (EHTH US) June 2, 2020. To generate this unprofitable growth, EHTH has been incinerating cash, which we expect it to continue to do until this value destruction slows down or stops. We conclude that EHTH is pursuing low quality, lossmaking growth while its LTVs are based on lower churn, pre-growth cohorts. EHTH’s persistence assumptions in its LTV model seem highly aggressive when compared to reality. EHTH’s future cash flows are therefore highly speculative.… more, EHTH’s highly aggressive accounting masks what we believe is a significantly unprofitable business. Muddy Waters Capital is an investment adviser with the U.S. Securities and Exchange Commission and is not registered as investment adviser in any other jurisdiction. You agree that each Muddy Waters Related Person is a third-party beneficiary to these Terms of Use. Copyright © 2020 Muddy Waters Research, All Rights Reserved. This limitation of liability applies regardless of any negligence or gross negligence of Muddy Waters Research, Muddy Waters Capital or any Muddy Waters Related Persons. All reports are for informational purposes only. The opinions, information and reports set forth herein are solely attributable to the applicable Muddy Waters Entity and are not attributable to any Muddy Waters Related Person (defined below) (other than the applicable Muddy Waters Entity). Carson Block's Muddy Waters Research announced Wednesday it has taken a short position in eHealth Inc., which owns a digital health insurance exchange. This website is owned by Muddy Waters Research. However, such information is presented “as is,” without warranty of any kind, whether express or implied. You agree that use of the research on this website is at your own risk. Neither Muddy Waters Research nor any Muddy Waters Related Person (including Muddy Waters Capital) are offering, selling or buying any security to or from any person through this website or reports on this website. If any provision of these Terms of Use is found by a court of competent jurisdiction to be invalid, the parties nevertheless agree that the court should endeavor to give effect to the parties’ intentions as reflected in the provision and rule that the other provisions of these Terms of Use remain in full force and effect, in particular as to this governing law and jurisdiction provision. The reports are the property of the applicable Muddy Waters Entity that published that report. You understand and agree that Muddy Waters Capital does not have any investment advisory relationship with you or does not owe fiduciary duties to you. These Terms of Use govern current reports published by Muddy Waters Research and supersede any prior Terms of Use for older reports of Muddy Waters Research, which you may download from the Muddy Waters Research’s website.

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