Here's Why Lemonade Stock Is Plunging on Thursday
The stock market was largely flat on Thursday, with the S&P 500 index up by about 0.2% as of 12:50 p.m. EST. However, insurance technology disruptor Lemonade (NYSE: LMND) continued its streak of volatile moves with shares down nearly 11%.
There are two main catalysts for today's move. First, Lemonade recently announced plans to sell 3 million new shares, and the company announced pricing of the offering this morning. Not only did the offering price at $165 per share (the stock closed at nearly $177 on Wednesday), but at 3.3 million shares, it was bigger than expected. When a company sells new shares, it dilutes existing shareholders, so this is a greater amount of dilution than was expected.
In addition, Lemonade's sell-off accelerated shortly after noon in response to Citron Research saying on Twitter that the stock will go "right back to $100."
Source Fool.com
