Pagaya's market cap surges past $16b

Pagaya bell ringing ceremony Credit:  Ido Isaac PR
Pagaya bell ringing ceremony Credit: Ido Isaac PR

The fintech company has overtaken Check Point to become Israel's second most valuable company, after its share price skyrocketed 900% in two weeks.

The share price of Israeli fintech company Pagaya Technologies (Nasdaq: PGY) rose a further 38.12% on Friday on Wall Street to $24.82, giving a market cap of $16.23 billion. With this latest rise Pagaya overtook Check Point Software Technologies Ltd. (Nasdaq: CHKP) to become Israel's second most valuable company. Only SolarEdge Technologies (Nasdaq: SEDG) with a market cap of $19.947 billion is more valuable.

Pagaya's remarkable run continues. On July 18, the company's share price closed at $2.53, its lowest point since completing its SPAC merger on June 23 at a share price of $6.08. By the end of its first week of trading the share price had fallen to $2.70 and it slipped even further in July. Yet over the past two weeks, despite no announcements from the company, or obvious developments, Pagaya's share price has skyrocketed 900%.

The conventional wisdom among market sources is that Pagaya has benefitted from a 'short squeeze.'

Estimates that an investor bought Pagaya shares to take advantage of the very low float value of the share. Meanwhile other investors who wanted to go short on the share, in other words profit from the share price falling, needed to borrow shares, but the smaller the float the more difficult it has been for them to find shares to buy to return the shares they have borrowed. So many short traders have needed to buy shares to cover their positions, and this has been pushing the share price up, in other words a short squeeze.

Pagaya provides solutions based on machine learning and big data that allow financial institutions to more accurately manage credit allocation procedures. Pagaya was founded in 2016 by CEO Gal Krubiner, CRO Yahav Yulzari, and CTO Avital Pardo. The current share price makes the founders billionaires 'on paper.' Pardo has shares currently worth more than $4 billion while Krubiner and Yulzari each have shares worth $2.75 billion each. However, the shares are still blocked and they are unable to sell them, although they already sold shares worth $200 million in secondary deals before listing on Nasdaq.

In 2021, Pagaya had revenue of $475 million, up $99 million from 2020. The company reported a net loss of $134 million compared with a net profit of $4.9 million in 2020. EBITDA was $45.9 million, three times the amount in 2020.

Published by Globes, Israel business news - en.globes.co.il - on July 31 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

Pagaya bell ringing ceremony Credit:  Ido Isaac PR
Pagaya bell ringing ceremony Credit: Ido Isaac PR
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