Today I cover Lemonade (LMND) stock, which has an IPO launch of July 2, 2020. Lemonade insurance uses Artificial Intelligence (AI) and chatbots (Maya) to replace salespeople. Lemonade offers renters and home insurance powered by tech and driven by social good. Should you buy this new disruptive-technology stock?
Lemonade, the so-called insurtech backed by SoftBank Group, could raise as much as $308 million after increasing the price range for its much-anticipated initial public offering.
Lemonade is expected to begin trading Thursday (July 2, 2020), Barron’s has learned. The New York–based start-up is selling 11 million shares at $26 to $28 each, according to a June 30 Securities and Exchange Commission filing. That’s up from the $23-$26 price range it had planned to offer. Lemonade is seen trading on the New York Stock Exchange under the ticker $LMND.
“As the world is buffeted by digital and societal revolutions, Lemonade Inc. is hoping to leverage the uncertainty created by those upheavals to reshape an industry meant to provide peace of mind: insurance.
Lemonade LMND, has filed for an initial public offering to be led by underwriters Goldman Sachs, Morgan Stanley, Allen & Co., Barclays, JMP Securities, Oppenheimer & Co., William Blair and LionTree.
The New York-based company, founded in 2016, says in its filing with the Securities and Exchange Commission that it uses artificial intelligence and big-data algorithms to streamline the processes of buying insurance and filing claims, while minimizing volatility and “maximizing trust and social impact.”
The company is attempting to approach the insurance industry the way companies like CrowdStrike Holdings Inc. CRWD, +2.65% and Salesforce.com Inc. CRM, +2.43% approached the software industry — by reimagining a legacy business for the world that exists now.
Lemonade says it wants to be an insurance company “built from scratch on a digital substrate, a contemporary business model and no legacy.” – https://www.marketwatch.com/story/lemonade-ipo-5-things-to-know-about-the-online-insurer-2020-07-01
In 2018, Lemonade donated 2.7 percent of its leftover premiums to charity, totaling $162,000. In 2019, that increased to 3.5 percent when it donated $631,500. And given that the company has never not lost money, Lemonade’s investors seem the generous ones, standing by while their money is given out to charity.
Meanwhile, Lemonade executive salaries totaled $1.5 million in 2019, and total executive compensation came to $6.3 million, a 10x amount compared to its charitable giving.
What are the strengths for Lemonade stock? What are the risks of Lemonade stock? Should you buy LMND stock?
I have been investing in the stock market for over 20 years, but I am not a financial advisor or a legal professional, and I am not providing financial or legal advice. The information provided is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs. FIRED Up Wealth and Eric Cuka do not make any guarantee or other promise as to any results that may be obtained from using our content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. Past performance is no guarantee of future results.
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