Root Insurance is a recently founded car insurance company looking to get it's footing down. This company is perfect for a wall streets bet squeeze. It is beaten down to the ground and highly out of favor. Their business is simple it is auto insurance on a mobile app. The short float is 25% market cap is a little bit over $50m million. Current cash situation is the most intriguing and important aspect here, they are sitting on $750 million cash on hand with $300 million in debt approx. Cash burn rate has been bad along with operating losses, but ROOT is increasing profitability slowly and they are clearly trying hard to reach profitability. Car insurance is what got Warren Buffet rich. Another extremely important factor to keep in mind is their total shares outstanding is 14.4 million this stock can easily squeeze with on onset of retail investors. They also have a partnership with Carvana to insure cars purchased with Carvana through a 3 click embedded experience. Obviously they had a poor past but that is the past from here out the possibilities for a big squeeze are high. Their current cash situation is enough to hold them down and in the meantime they are raising car insurance rates drastically which will in turn increase margins and get them closer to profitability. Being a tech based insurance company mostly all of their costs are in their workforce and than claims, this seems set up to scale. The moat and licenses and regulatory overcoming Root already passed to become a licensed mobile car insurance company currently in 34 states has inherit value that is being passed up on by the rest of Wall Street napping. Let me know any questions or anything you need or want to know. This company might seem riddled with pests but I think it is setting up perfect for a parabolic new WSB squeeze. If you have inputs please send
Leave a Reply