Headquartered in New York, Lemonade (NYSE:LMND) is a global company that’s quickly establishing itself as a premier provider of “insure-tech.” So far, long-term investors have enjoyed strong gains in LMND stock since its highly successful initial public offering (IPO) in early July.
![LMND stock logo displayed on smartphone laying on top of computer keyboard.](https://investorplace.com/wp-content/plugins/lazy-load/images/1x1.trans.gif)
Lemonade hasn’t been coy about its intentions to fully disrupt the insurance market. It seems as if Lemonade is on the war path to overturn the boring, boomer-dominated, tech-backwards conventional insurance market.
In other words, Lemonade is the poster child of millennial/Gen Z business models. Because of that, LMND stock should have strong appeal to bold, young traders.
This leads us to a certain group of trading rebels who’ve garnered a whole lot of attention lately – and who might, in the near future, take a shine to LMND stock.
A Closer Look at LMND Stock
For most retail investors seeking to grab shares of LMND stock at a ground-floor bargain price, the battle was over before it even began.
Lemonade had originally indicated a price range of $23 to $26 for LMND stock. Not long afterwards, though, the company raised the initial public offering (IPO) share price to $29.
LMND stock debuted on the New York Stock Exchange on July 2 at $50.06. Startlingly, the share price jumped by 132% on LMND’s first day of trading.
Just four days later, on July 6, the buyers pumped the stock all the way up to $96.51. With that, all hopes of getting a rock-bottom price with LMND stock were dashed.
A lengthy period of uninspiring price action followed. A new bull cycle commenced in November, however. By Jan. 11, LMND stock had attained a nose-bleed all-time high of $188.30.
Thankfully, as of Feb. 5, LMND stock had cooled off and settled at $144.82. Hence, it’s possible to take a position in LMND below the peak price – and prior to an impending run-up, if it happens.
The Next GameStop?
On a little corner of the Internet, a surprisingly powerful group of message board participants have changed the face of the financial markets.
I’m referring to the now-famous message board platform Reddit, where there’s a subreddit called r/WallStreetBets which launched certain stocks into the stratosphere.
These stocks include GameStop (NYSE:GME), AMC Entertainment (NYSE:AMC), Bed Bath & Beyond (NASDAQ:BBBY) and Koss (NASDAQ:KOSS).
Lately, market commentators like to speculate about which stock will be r/WallStreetBets’ next short squeeze target.
I must admit, I’m giving in to the temptation and proposing that LMND stock could be a perfect candidate for the Reddit crowd.
The “Redditors” are young and love to disrupt old, stodgy financial structures. Their vision and Lemonade’s mission are a match made in heaven.
Lemonade might not be on board with a Reddit-induced run-up. But then, the folks at r/WallStreetBets never seemed particularly concerned about getting blessings or permission.
Sticking It to Citron, Again
What they are concerned about, I would suppose, is meting out justice in a financial market which has favored institutional investors for generations.
The r/WallStreetBets users certainly seem to have beaten short seller Citron Research at its own game when they reportedly squeezed Citron out of its short position in GameStop stock.
It was a veritable David-versus-Goliath story which the media made both famous and infamous. Heck, the Reddit group even got an acknowledgment from Tesla (NASDAQ:TSLA) CEO Elon Musk, who tweeted “Gamestonk!!” while including a link to r/WallStreetBets.
So, here’s another wrinkle in the story. Not too long ago, Citron issued a prediction that LMND stock will fall to $100. With that, Citron vowed to rip Lemonade a “new one.”
It’s not difficult to imagine that the Reddit traders would be more than happy to put Citron in its place. Pumping LMND stock would be a perfect way for them to teach Citron a lesson in humility – while, yet again, reaffirming r/WallStreetBets’ power to move the markets.
The Bottom Line
It’s a risky bet to buy LMND stock because Reddit users might pump up the share price.
Still, it’s a plausible idea that this could happen soon. Either way, if you’re into tech-forward companies with a rebellious streak, LMND stock is worth considering.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.