In this clip from "Wheeling & Dealing" on Motley Fool Live, recorded on Feb. 4, Motley Fool contributors Toby Bordelon and Lou Whiteman debate whether Lemonade (LMND 1.77%) is a good buy or not and discuss the benefits Metromile (MILE) can offer the insurance disruptor.
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Toby Bordelon: Bryce notes, he saw Metromile's shareholders approved the Lemonade deal. Is it a good buying opportunity for Lemonade? It might be. I don't know. Lemonade has got some issues. If you think car insurance is a good growth opportunity for them and it probably is, honestly, then I think buying Metromile is a very good deal for them versus trying to build all of that out themselves.
Lou Whiteman: I think you're doing a good job. You're trying to split hairs with this answer and I think that's exactly what you should do. I think it's a speculative time to buy Lemonade in general, or just don't make it 100% of your portfolio, but nothing about Metromile is bad. Considering they're basically getting it for net of cash. Metromile was a failed business, but if they get nothing else out of it, they get the license, they get to operate, they get to ramp that auto business real quick. I don't see downside for Lemonade there. I'm a shareholder. We'll see what happens with it long-term but I don't see any downside with the Metromile deal.
Bordelon: Yeah. I think that's right. I think the way to say it is Metromile is definitively a good deal for Lemonade. Whether Lemonade is a buy with or without it, that's another question.
Whiteman: That's the question.
Bordelon: Nothing about Metromile should make you not want to buy the stock if you were already inclined to do it. If you were on the fence, maybe it makes you a little more interested, honestly.