Why Shares of Lemonade Soared This Week
Shares of Lemonade (NYSE: LMND) soared as much as 33.2% this week, according to data from S&P Global Market Intelligence. The insurance start-up posted better-than-expected revenue and earnings for the second quarter. As of this writing, after the close on Thursday, Aug. 11, the stock is up 26.3% this week.
Lemonade reported earnings on Tuesday, Aug. 9. Revenue grew 77% year over year to $50 million, and net loss was $67.9 million, or $1.10 per share. These beat analyst expectations for $47.6 million in revenue and a net loss of $1.33 per share. This earnings beat (even though it was a loss) likely caused Lemonade's stock to soar this week.
It is also possible Lemonade's stock popped so quickly because so many of its shares are sold short. According to YCharts, an estimated 13.05 million of Lemonade's 62 million shares outstanding are being loaned to short-sellers. If short-sellers decide to buy these shares back, it can put some upward momentum on the share price. This is called a short squeeze and could have happened with Lemonade stock this week.
Source Fool.com
