Lemonade drops 11% after notorious short-seller says the stock should trade 43% below current levels
- Date: 15-Jan-2021
- Source: Business Insider
- Sector:Financial Markets
- Country:Middle East
Lemonade drops 11% after notorious short-seller says the stock should trade 43% below current levels
Lemonade
Lemonade stock fell as much as 11% on Thursday after a negative tweet from notorious short-seller Citron Research.
The online-insurance platform has outpaced the market considerably since its July IPO with shares up more than 130%.
Lemonade stock boasts a market cap in excess of $9 billion and trades at almost 100-times sales.
Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
Lemonade's stock dropped as much as 11% on Thursday after Andrew Left's notorious short-selling fund, Citron Research, predicted the online-insurance platform will fall back to $100.
Founded by Daniel Schreiber and Shai Wininger, Lemonade operates an online insurance platform that uses AI chatbots to help service customers.
Lemonade finished Wednesday at $176.64 per share, meaning that a decline to $100 would be a 43% loss.
Of course, that hasn't been the case very often of late, as short-sellers have struggled over the past few years. Misses on big bets on Tesla, Moderna, and others have cost short-bias funds billions.
In fact, short-biased funds lost over 47% through November 2020 alone, according to the HFRX Equity Hedge: Short Bias Index.
Citron acknowledged the poor performance of short-sellers over the past few years but still declared the fund would be ripping "management