Short interest in the two recently IPOâ€™ed ride hailing and sharing services, Lyft Inc (LYFT) and Uber Technologies (UBER), total almost $2 billion and they hold the top two spots in the U.S. trucking sector. LYFT sits atop the trucking league table with $1.06 billion in short interest while UBER, which IPOâ€™ed less than two weeks ago, trailing slightly behind at $926 million.
LYFT shares shorted as a percentage of it float is almost 53% with most of the available lendable stock now taken down. Stock borrow rates on existing short positions are trading between 17% and 25% fee while stock borrow costs on new shorts are trending over 32% fee. UBER short selling has tailed off since the first few days after its IPO, as its stock price inches back towards its original $45 IPO price. There is still ample UBER stock loan availability with less than 50% of its lendable stock currently out on loan. With only 12.28% of its float is being shorted, UBERâ€™s stock borrow supply not an issue at the moment, and the stock borrow rate on both existing and new shorts is between 1% and 2% fee.
We are seeing mixed but active short activity in LYFT today, with both new short selling and buying to cover trading canceling each other out. UBER trading is much more active today with over one million shares of additional short selling hitting the tape as its stock price is down almost 2% in mid-afternoon trading. Both value and momentum short traders have been active in both of these new IPOâ€™s, but with LYFT borrow supply limited and its high borrow costs eating into expected Alpha, we are seeing UBER shares getting the brunt of the short selling activity.
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Managing Director Predictive Analytics, S3 Partners, LLC
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