In early August LYFT Inc (LYFT) surprised the market by announcing that its pre-IPO lockups would expire one month earlier than planned. On August 19th 258 million shares of LYFT stock would be eligible to be sold and the market braced for a wave of long selling that would negatively affect LYFTâ€™s stock price. In actuality, the effect was minimal, with LYFTâ€™s stock price only falling by 2.40%, although the stock is down 12.76% since the August 7th announcement date.
With both the S&P 500 and Nasdaq up 1.2% this week short sellers were busy trimming their short exposure to the market. We saw just over 95 million short shares covered this week, worth just over $7 billion.
Uber Technologies Inc (UBER) and Lyft Inc (LYFT) shares prices had been strengthening recently, but after UBER reported a larger than expected $5.24 billion second quarter loss, both stocks are down for the day. UBER and LYFT are the largest shorts in the domestic Trucking Sector and todayâ€™s performance will certainly increase the amount of short selling in both stocks.
Long shareholders can take advantage of heavy short selling in their securities by lending out their â€śin demandâ€ť shares and earning stock loan fees by lending out their â€śfully paid forâ€ť shares. Stock borrow fees are calculated daily and stock loan transactions are done on an â€śovernightâ€ť basis (the stock loan can be terminated or recalled daily.) Below are the top 25 most expensive U.S. stock borrows with at least $50mm in short interest.
We calculate short interest and stock borrow rates for nearly 7,000 domestic equities daily. Domestic equity short interest is $808 billion and decreased by $28 billion over the last month. The top 20 most shorted stocks make up 12% of all the equity shorts. Tesla and the FAANG stocks are all in the top 20.
Short sellers have been active in several stocks that have high short interest relative to their float. Stock borrow rates are climbing, recalls are increasing and lendable supply is beginning to dwindle in stocks like DDS, XON, HEAR, AXDX and BYND.
Short sellers are paying high short financing fees in some securities as stock loan supply has been taken down. BYND short sellers are paying over $2.3 million\day in stock loan financing fees. If you are long any of these stocks it might be worth while talking to your broker to lend them out and earn a portion of those borrow fees.
Beyond Meat Incâ€™s (BYND) stock price soared to $201.88 at the open, a +19% move, after being up 12% on Monday. BYND short sellers took a $100 million mark-to-market hit to their P\L yesterday and were down an additional $173 million in mark-to-market losses at the open. At the open, short sellers were down $739 million in mark-to-market losses since BYNDâ€™s IPO. BYNDâ€™s stock price could not hold their early morning gains and is now up just under $1 for the day. Shorts are now down only $4 million in daily mark-to-market losses, down a total of $570 million in mark-to-market losses since the IPO.
Following less than hoped for fourth quarter results RH turned the tables on analysts and reported first quarter results that beat on both earnings and sales. In addition to its strong performance CEO Gary Friedman gave a positive outlook for the rest of 2019. RH surged at the open and maintained most of its gains, up 18% in mid-afternoon trading. Short sellers have been trimming their exposure to the company in 2019, covering 2.0 million of their shares shorted, a decline of -28%. Most of the short covering occurred after RHâ€™s stock price fell almost $29/share on March 29th and short sellers began taking profits.
Beyond Meat Inc (BYND) reported 1st Quarter increased revenues of $40.2 million, an increase of 215% year on year as well as projecting full year revenues of $210 million. With sales and retail demand growing at breakneck speed Beyond Meat has increased its manufacturing capacity in hopes of meeting the additional demand. The plant based protein food producer believes it will become â€śbreak evenâ€ť on an EBITDA basis for the year.