Short Sellers Are Taking Aim at Trupanion (TRUP) Stock


  • Trupanion (TRUP) stock is falling today on a short seller’s attack.
  • Short seller Marc Cohodes is not the only one warning about the pet insurance stock, however.
  • Trupanion is seeing higher costs, limited revenues and slower growth post-pandemic.
a veterinarian holding a small white dog
Source: Shutterstock

Trupanion (NASDAQ:TRUP) stock is coming under pressure today. This morning, short seller Marc Cohodes attacked the pet insurance company in a tweet. Cohodes has gained notoriety most recently by attacking FTX and warning investors about Signature Bank (OTCMKTS:SBNY).

Meanwhile, PAA Research has been saying to short TRUP stock since 2018. PAA issued its latest report against the company in April.

Trupanion shares opened on May 8 at about $26 per share and a market capitalization of $1 billion on 2022 revenue of about $900 million. At its peak in late 2021, shares were selling for as much as $144 apiece.

TRUP Stock: Pet Insurance Cemetery

Trupanion was founded in Vancouver in 1998 under the name Vetinsurance. According to the company, it “ended last year with 343,649 enrolled pets throughout North America.” Trupanion came public in 2014.

Back in February, one analyst wrote that CEO Darryl Rawlings has been exercising long-dated options, then selling the stock. High loss ratios and higher premiums are hurting results for the company as well. The end of the pandemic has also meant fewer people are adopting pets.

TRUP stock is currently down 59% for the past 12 months, with losses accelerating since March 23, when the company announced that Chief Financial Officer Drew Wolff was leaving in June and two more executives were leaving immediately.

On May 4, the company reported a loss of $24.8 million, or 60 cents per share, on revenue of $256.3 million for the first quarter. Revenue for Q1 was up year-over-year (YOY), but costs rose faster.

Meanwhile, Trupanion is also operating in the highly competitive pet insurance market, which includes Berkshire-Hathaway’s (NYSE:BRK-A) (NYSE:BRK-B) Geico and Lemonade (NYSE:LMND).

What Happens Next?

Cohodes may be right about Trupanion and TRUP stock. And if he is, plenty of other people are right, too.

On the other hand, highly public calls for a short can be followed by calls for a short squeeze. Shorts are currently restricted to only getting into the trade on an uptick.

On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Tweet him at @danablankenhorn, connect with him on Mastodon or subscribe to his Substack.

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