Investors have been on edge for months about a wide variety of issues, but one of those fears came to a head Thursday morning. Russian troops attacked Ukraine overnight, shattering hopes for a diplomatic resolution and sending stock markets falling sharply. As of 8 a.m. ET, futures on the Dow Jones Industrial Average (^DJI 0.35%) were down 771 points to 32,295. S&P 500 (^GSPC 0.59%) futures dropped 105 points to 4,117, while Nasdaq Composite (^IXIC 0.83%) futures sank 432 points to 13,076.
Even though the vast majority of stocks were down, South Jersey Industries (SJI) stood out from the crowd, posting huge gains on news that it will become the latest company to go private. Meanwhile, earnings continued to come out, and disruptive insurance fintech Lemonade (LMND 1.39%) was among the many high-growth prospects this earnings season that have fallen sharply following their financial reports.
South Jersey gets a buyout bid
Shares of South Jersey Industries soared 47% in premarket trading Thursday. The natural gas utility and clean energy development company announced that it would go private after having received an acquisition bid from a private investment vehicle.
South Jersey entered into an agreement with Infrastructure Investments Fund, which as its name suggests focuses on investing in critical infrastructure assets. The deal values South Jersey at $8.1 billion, with its terms paying $36 per share in cash to shareholders.
South Jersey CEO Mike Renna noted that the transition from fossil fuels toward low carbon and renewable energy made the timing of the acquisition particularly opportune. Infrastructure Investments Fund has considerable experience in working with businesses that are working toward similar goals to South Jersey's, and South Jersey anticipates being able to continue serving its regulated utility customers while moving forward with modernization efforts and keeping up with the fast pace of innovation in the space.
The move is the latest in a series of acquisitions of old-economy assets, many of which have traded at some of the most attractive prices seen in recent years. If the market downturn continues, investors can expect more deals like this one.
Meanwhile, shares of Lemonade were down more sharply than the overall market, falling 23%. The insurance provider continued to see growth in its fourth-quarter financial report, but investors weren't pleased to see another spike higher in loss ratios.
Key metrics for the period were mixed. Total customers jumped 43% year over year to 1.43 million, and a 25% rise in premium per customer pushed total in-force premium up 78% to $380 million. Those numbers reflected the new Lemonade Car auto insurance offering, which prompted new rounds of cross-selling opportunities for customers who already had renters, homeowners, or pet coverage.
However, not everything was strong. Annual dollar retention came in at 82%, reflecting the countervailing factors of changes in policy value and churn. Also, loss ratios moved 23 percentage points higher to 96%, with Lemonade saying it had under-reserved for some large losses in the past. The company emphasized that its accident-related loss ratios didn't spike higher between the third and fourth quarters. Nevertheless, net losses more than doubled to $70 million, or $1.14 per share.
Lemonade has strong prospects to keep expanding its business, but investors are increasingly impatient with companies whose best days might still be years in the future. That's getting reflected in the share prices of many companies tied to technological innovation, and it's unclear how long shareholder skepticism of their efforts might continue.