In just a few days since Lyft Inc.’s long-awaited initial public offering, the ride-hailing company’s shares have become the second-largest short in the U.S. trucking sector.
That’s according to Ihor Dusaniwsky, managing director of financial analytics firm S3 Partners, who wrote Wednesday that Lyft LYFT, -0.37% short-sellers have “gone into overdrive,” shorting more than 38% of the 32.5 million share float.
“We can expect Lyft to be a significant short in the market for long time, especially with analysts already posting ‘sell’ recommendations less than a week after its IPO,” Dusaniwsky said.
Stock loan supply is beginning to stabilize, according to S3. Dusaniwsky saw stock-borrow rates falling steadily during Wednesday’s trading session, reaching about two-thirds of Tuesday’s levels by the afternoon, though Lyft still has by far the largest borrow fee among stocks with more than $50 million in short interest.
“There will be a slow and steady contraction of Lyft stock-borrow rates as lenders are loathe to forgo such a windfall of revenues too quickly,” he wrote.
Lyft shares have sputtered since initially beginning IPO day on a high note. The company priced shares at $72, at the high end of an upwardly revised range, and shares saw an early pop in their first day of trading Friday before settling down.
The last few days have been less kind to the shares, however. They rose 1.2% in afternoon trade Wednesday, but were still 3.1% below the IPO price.
Recent analyst commentary has been relatively muted. An analyst at Seaport Global began coverage with a sell rating and $42 price target, while a Guggenheim analyst started the stock at neutral.
The downbeat outlook on Lyft’s stock comes at a time that the Renaissance IPO exchange-traded fund IPO, +0.47% has soared 34% year to date, while the S&P 500 index SPX, +0.21% has climbed 14%.