The stock market was having a modestly strong day on Wednesday, with all three major averages up by 0.4% or less at 2 p.m. EST. However, insurance technology company Lemonade (NYSE:LMND) was a big outperformer. Shares had risen by 11%, and this came on the heels of a double-digit rise just a day earlier.
There isn't any company-specific news on Wednesday, nor are there any analyst upgrades driving Lemonade's price higher.
Instead, this seems to be a continuation of the momentum that followed Lemonade's lockup expiration on Tuesday. The high-momentum insurance disruptor's stock fell sharply on Monday in anticipation of the lockup expiration, and for good reason -- 44 million shares, or roughly two-thirds of all Lemonade stock -- became available to trade by insiders and early investors for the first time beginning on Tuesday.
Well, this turned out to be a non-event. Based on yesterday's price action and the stock's volume (about 8 million shares between today and Tuesday), it doesn't seem like many insiders are in a big rush to cash out.
Now that the lockup fears have subsided, investors can once again focus on Lemonade's business. And there's no denying the growth momentum. The company's in-force premiums nearly doubled year-over-year in the third quarter and customer count grew by 67%. Most experts agree that Lemonade is the most promising insurance disruptor. Since the company has just started to scratch the surface of the $5 trillion global insurance industry, it's not a surprise that investors seem to be excited about buying the stock.