Image of Andrew Left

Citron Research’s Andrew Left criticized insurance company Lemonade Inc. (LMND) on Friday, Jan. 15, saying its stock multiple is based on empty marketing tactics.

The Lemonade Bear Case

In a Twitter live video, Left dismissed Lemonade Inc's claims of bringing new technology to the insurance industry, saying the company's technology is no different from insurers like Progressive Corp. (PGR) or State Farm. "They've been lying to their customers and their shareholders," said the noted short seller.

The company has not responded to a request for comment.

Not An ESG Company

He also blasted Lemonade's claims of being a "socially good" company as an easy marketing ploy. Left said Lemonade is taking advantage of younger investors' interest in supporting companies that have a positive social impact, like Tesla Inc. (TSLA).

"It's playing on the millennial investors," he said, adding that the company has a higher multiple than Zoom Video Communications (ZM), Uber Technologies Inc. (UBER), or Tesla Inc. Lemonade insiders have sold $400 million in the past six months but gave just $1 million to charity last year, he said.

Left said the Securities and Exchange Commission and the Federal Trade Commission should look more closely at companies that make claims of being socially responsible.

Price Action

Shares of Lemonade ended Friday's trading down 6.79% at $147.74 on Friday. Left's video posted to Twitter at 11:30 A.M.