MILE - Why Are Lemonade and Metromile Plunging on Monday?
The stock market was having its worst day since October 2020 on Monday morning, with all three major averages down by more than 2%. However, insurance technology companies Lemonade (NYSE: LMND) and Metromile (NASDAQ: MILE) are dramatically underperforming the market. As of 10:15 a.m. ET, Lemonade and Metromile shares were lower by 10% and 11%, respectively.
There isn't any company-specific news causing these stocks to decline, and neither company is set to report earnings for another couple of weeks. Rather, the recent sell-off in stocks has disproportionately affected speculative growth stocks, and that is certainly the case on Monday as well. The decline seems to be fueled by general interest rate and inflation fears (rising rates are almost always a negative catalyst for growth stocks), and investors are anxiously awaiting the Federal Reserve meeting set to take place this week.
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Why Are Lemonade and Metromile Plunging on Monday?