Lemonade!
Hey one of our subscribers gleefully mentioned to us today about a company that we highlighted back on July 17th in this post, LMND Lemonade Inc.
Now we must admit that the post IPO period was volatile and LMND dropped from around $95 down to its post IPO low near $44 in early September. Here is the current chart, what a run recently, check it out:
We must note that IPOs are a bit tricky as companies restrict the sale of IPOs, this is not something the SEC requires, rather it is something each company sets forth. Or as Investopedia writes,
lock-up periods are not mandated by the Securities and Exchange Commission (SEC) or any other regulatory body. Instead, lock-up periods are either self-imposed by the company going public or required by the investment bank underwriting the IPO request.
However, it must be noted that there are most likely option structures certain qualified investors could put in place during this restricted period to hedge their positions and some investment banks may be the cause for the post IPO drop as they hedge out of such structures. Standard restriction post IPO periods can range from 90 to 180 days or longer.
When we look at the chart we can see that since the late October lows, the 50eMA was consistently defended and now we are well above it as LMND trades up near $110.
As far as the reasons for the run up here is what the fool.com had to say:
Consistent analyst recommendations and investor optimism about the company's growth potential
Annual premium collections nearly doubled year over year in Q3
Customer count grew by 67%
It should also be noted that businesswire.com noted that yesterday, Daniel Schreiber, CEO and cofounder, did a presentation at the Goldman Sachs U.S. Financial Services Conference, a link to a replay of this webcast can be found at the Lemonade Homepage
No doubt the webcast played a role into exposing the optimism by the CFO which could be the rationale for today’s continuation rally.
Anyway we hope you continue to watch this one, we truly think the industry is ripe for disruption and with a hefty $5 Trillion in overall size, let’s just say Lemonade may just have a very bright future ahead for itself.
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