Why Shares of Pagaya Crashed Today

Shares of the artificial-intelligence loan platform Pagaya Technologies (NASDAQ: PGY) traded nearly 60% down as of 11:43 a.m. ET after the company submitted a regulatory filing to sell up to 46.1 million shares, and potentially as much as 674 million shares.

Pagaya went public in June through a special purpose acquisition company (SPAC). Like most SPACs with high valuations, Pagaya slumped after it started trading independently, with most tech and fintech valuations way down this year.

But in a registration statement in July, the company revealed that, due to redemptions, its public float was extremely small at less than 1 million shares. That led retail traders to grab hold of all of the outstanding shares and drive the price higher. The stock, which now trades at $2.80 per share, had risen all the way to about $30 at its height.

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Source Fool.com