Root, Inc. (ROOT) stock prices were up by a significant 20.87% shortly after market trading commenced on June 9th, 2021, bringing the price per share up to USD$13.68 early on in the trading day.
Meme Stock Phenomenon
Despite there being an absence of significant news recently or any changes in fundamentals, ROOT’s fortuitous surge in its stock value is primarily a consequence of the growing meme stock phenomenon that has gripped the stock markets. The phenomenon is driven by users of the social media platform, Reddit, where they collaborate and target underdog companies that corporate investors think will fail. Resulting from the short squeeze, retail investors drive the price of these heavily shorted stocks up, thereby profiting while corporate investors scramble to mitigate losses.
Expansion into Wisconsin
June 3rd, 2021 saw the company announce the entry of Root Insurance Company into Wisconsin, now available to the 4.3 million drivers in Wisconsin. This expansion of the company’s market footprint represents the 31st state to be included in the network of ROOT’s coverage. Originally founded in Columbus, Ohio, ROOT is keen to consolidate its market presence with its penetration of the Great Lake states.
The company is founded on the power of data, with the innovator in the insurance space being committed to unbreaking an outdate industry with the use of modern and mobile-first technology. ROOT prides itself on facilitating the provision of the best-in-class experience to new and existing driver customers.
Revolutionizing Auto Insurance
The ROOT application makes use of the technology in drivers’ smartphones to gauge how they drive, with the resulting driving score being the biggest factor in a ROOT car insurance quote. This is an excellent alternative to the discriminatory demographic factor typically used, such as age, ZIP code, or credit score. ROOT facilitates the regaining of control by driver who are able to manage everything through the app, such as choosing coverages and filing claims in minutes.
Collaboration with Safekeep
The company also announced near the end of May 2021 that it had engaged Safekeep, the technology company that uses AI to facilitate maximum possible net recovery through its Claimflo system. As the company’s subrogation solution provider, Safekeep will serve to improve ROOT’s identification and ensure the greatest possible recovery of subrogation opportunities within its claims portfolio.
Future Outlook for ROOT
Armed with the recent surge in the value of its equity, ROOT is keen to capitalize on the opportunities afforded to it to prepare itself for the post-pandemic economy. The company is taking measures to address fundamentals so as to ensure more organic growth over the future. Current and potential investors are hopeful that management will continue to leverage the resources at their disposal to facilitate significant and sustained increases in shareholder value.