Car Insurance Stock Surges on Reported Buyout Talks

Embedded Insurance reportedly wants to buy ROOT for $19.34 per share

Digital Content Manager
Jun 22, 2023 at 10:56 AM
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Online car insurance name Root Inc (NASDAQ:ROOT) is up 44.8% to trade at $13.93 this morning, after the Wall Street Journal reported Embedded Insurance expressed interest in acquiring the company for $19.34 per share -- a more than 53% premium to last night's close.

The security yesterday notched its best single-day percentage gain on record, and is now trading at its highest level since August. The shares also conquered long-term pressure at their 200-day moving average, and boast a whopping 212.8% year-over-year lead. 

The brokerage bunch still leans bearish, with seven of the eight analysts in question rating ROOT a tepid "hold." Plus, the 1.68 million shares sold short make up 23.7 of the equity's available float. Should some of this pessimism begin to unwind, the shares could surge higher still.

Root stock's typically quiet options pits are exploding with activity today, with 1,415 calls and 1,370 puts exchanged so far, which is 132 times the intraday average volume. The most popular contracts are the July 12.40 call and 7.50 put, with new positions being opened at both.

Short-term traders are heavily put-biased. This is per the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.00, which sits higher than all readings from the past 12 months. 

 

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