Shares of online insurance company Lemonade plunged as much as 15% Monday as investors prepare for the company’s insider selling restrictions to end on Tuesday.
Lemonade has been among the best performing companies that went public this year. Shares have soared more than 300% above its initial offering price in July. However, roughly 44 million shares will be eligible for sale starting Tuesday, and traders are bracing for potential volatility.
Lemonade, launched in 2016, offers insurance to renters and homeowners. It uses artificial intelligence and chatbots to make it easier and faster to find and buy insurance. Investors believe the company could soon venture into more markets, such as auto insurance, which has helped send shares higher.
“We believe Lemonade is well positioned to take share (quickly) of the trillion dollar insurance industry one product at a time,” JMP Securities analysts wrote in a December note.
Lemonade was named of of CNBC’s Disruptor 50 companies in 2020, placing at No. 17.
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