Why Pagaya Stock Dropped 23% in October
Shares of Pagaya Technologies (NASDAQ: PGY) stock tanked another 23% in October after losing 84% of their value in September according to data provided by S&P Global Market Intelligence. The company, which was taken public by a special purpose acquisition company (SPAC) deal in June, is feeling the blow of rising interest rates, as well as a sell-off due to the end of a lockup period and a secondary stock offering.
Pagaya went public last June, and after an initial drop in its price, its stock reached as high as $27 in July. It has made a rapid descent from those highs.
Part of its original attraction was due to its low float, or the amount of stock available on the market. That sparked investors to grab some. However, the Federal Reserve's increase in interest rates directly impacts Pagaya's core business. Pagaya uses artificial intelligence to help company partners price loans and other forms of credit, and it sells loans to institutional investors.
Source Fool.com
