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The shares of Lyft Inc. sold on Friday while their rival Uber Technologies Inc. had filed documents for an initial public offering.
Lyft Stock
LYFT, -1.83%
was down 5.8% in morning trading before reducing some of its losses. Negative pricing action resulted in both long positions or bets on stock appreciation and short sales – losses on the stock – according to S3 Partners analyst Ihor Dusaniwsky, who said over a million this morning's session.
Dusaniwsky wrote that stock-based fees are rising and are currently hitting an annualized rate of 3%. In comparison, the borrowing costs for guaranteed common shares, or large capitalization companies owned by a large holding, may be less than 0.5%.
"If short sales continue at this rate, available loan stocks will begin to show signs of scarcity and rates could reach a double-digit level in a few days," he said.
Do not miss: Lyft short sellers are in overdrive after their IPO
See related: Short sellers are not bad, but they are misunderstood.
However, with the intensification of activity in the near term, the supply of debt securities on stock could soon dry up, wrote Dusaniwsky. If that happens, "the price fluctuations of Lyft's shares will depend mainly on the vagaries of its long-standing shareholders," he said.
Short bets on the Lyft shares, which cost $ 72 and open at $ 87.24, have proven to be much better than the long stakes so far. Short films have generated about $ 200 million in market value gains since the IPO, according to data from S3, a company specializing in financial technology and analytics.
Just two weeks after its IPO, S3 said Lyft's short-term interest in its float was the fourth largest US stock with over $ 50 million in short-term interest.
Uber IPO: 5 things to know about potentially the biggest IPO in recent years
Wedbush analysts had already explained that Uber's expectation
UBER, + 0.00%
The prospectus acted as an "overhang" on Lyft's shares, but they admitted after filing the record that even with the Uber statistics currently available, investors "do not yet have much more clarity on some key comparable statistics ". in part because Uber does not generally distinguish between its US and international operations and reports many other parameters that are not directly comparable to those of Lyft.
The publication of Uber's prospectus also put pressure on the shares of GrubHub Inc.
WORM, -5.76%
Uber said its Uber Eats platform, GrubHub's rival, "has become the largest meal distribution platform in the world outside of China, based on gross bookings."
Read also: Grubhub's stock cracks up a lot for Uber.
Lyft shares are down 1.4% in the afternoon. They are about 16% of the IPO price. At the same time, the S & P 500 index
SPX, + 0.66%
gained 3.1%.
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