All it needs is the right names behind it, and its poor start won’t matter. The bull thesis here is that Hippo could very well end up a phoenix rising from the ashes. The company didn’t have a stellar earnings report, but that might not matter. That deal was said to double its underwriting capacity, a surefire path toward increased revenues. Hippo also formed a relationship with Ally Financial (NYSE: ALLY) just after going public. There’s very clear potential for Hippo Holdings to impress financial institutions, despite the chaos surrounding its IPO. The company’s CEO Assaf Wand and CFO Stewart Ellis met with investors at a financial technology conference held by Goldman Sachs (NYSE: GS) on Sept. Big Names Are Interested in Hippoĭespite its unfortunate start, institutional investors are still keen to understand what Hippo Holdings has in store. That increase is likely attributable to the widespread desire to disrupt the centuries-old insurance industry. But HIPO shares have shown resilience this month, rising to nearly $7 on Sept. There is no analyst coverage of the company currently, so there’s no help there. If it truly has the capacity to challenge Lemonade, then current prices indicate real upside.īut how can investors judge the upside potential of HIPO stock, or what to expect of it in terms of price? Well, it’s difficult to say. Part of that hope for a turnaround lies in the idea that Hippo could have been excessively punished or oversold by the market. That still left the insurance tech company with a reasonable shot at success. Hippo did receive $550 million from the IPO, even though the SPAC proceeds failed to materialize as expected. But even after that patchy start, there is hope for HIPO stock.
It seems that trepidation leading up to the IPO caused “weak hands” to err on the side of caution as the SPAC deal came under greater scrutiny.
An option to sell the shares for their original $10 price, as well as an option to later acquire the public company’s shares.” To make it more attractive, investors in such a round receive two incentives. “ Withdrawing part of the capital raised for the SPAC is a possible scenario in these mergers as the investors in the SPAC are the so-called ‘weak hands,’ who buy the SPAC shares even before the identity of the company that will be merged into it is known. This triggered a drastic fall in HIPO stock prices.Ī recent article outlining the fiasco offers a possible explanation for what caused the chaos: Hippo was expected to receive $550 million in institutional private investment in public equity (PIPE) funding and $230 million in SPAC proceeds. That money was returned to investors after Reinvent Technology Partners withdrew 83% of its capital from the project. Ultimately though, Hippo would lose $192 million in funding.
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