The date has arrived for the lifting of the lock-up applying to half of the shares of the Israeli fintech Pagaya Technologies (Nasdaq: PGY) held by its founders, shareholders whose stakes date from the time when the company was private, and the SPAC with which it merged. The company’s stock price reacted with a 60% drop in premarket trading on the Nasdaq. In the meantime, the company has filed a shelf prospectus with the U.S. Securities and Exchange Commission for a stockholder offering.
Pagaya provides financial firms with AI and big data-based technology to facilitate more accurate allocation of credit to customers. The company went public in June when it completed a merger with a US SPAC at a valuation of $8.5 billion.
Despite the sharp decline in financial markets between the signing of the SPAC merger agreement about a year ago and the closing of the deal three months ago, the company’s valuation has not been reduced and most of SPAC investors chose to buy out their investments rather than participate in the merger.
After trending negatively for the stock in its first few weeks of trading, the trend suddenly and inexplicably changed, and for several consecutive days the price soared, rising more than tenfold in two weeks. For a short time, Pagaya was actually Israel’s most valuable company. The assessment was that it was a case of a short squeeze: as the free float in Pagaya shares is very low, short sellers found it difficult to cover their positions, which drove the price up. of action.
Although the trend has changed again and the stock price has weakened considerably since the peak, the strong increases in July were enough to push the price above the threshold set in the offering documents, so that instead of locking the assets of interested parties for six to twelve months, the lifting of the closed session was brought forward. As mentioned, half of the shares are released today; the rest will be released on December 19.
Published by Globes, Israel business news – en.globes.co.il – September 20, 2022.
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