Skip to main content

Lyft Inc., just days into its existence as a publicly traded company, is drawing unwanted interest from Wall Street’s pessimists.

Traders who bet that the stock will decline are piling into the ride-hailing company. These short-sellers borrow and sell the shares, aiming to buy them back at a lower price sometime in the future.

One way to gauge their interest in a stock is to look at the number of shares that are being lent, and as of Tuesday, 6.6 million shares, or US$455-million worth of Lyft, were on loan, according to the data provider IHS Markit. That was equal to 20 per cent of the shares actually available for trading, known as the float.

Story continues below advertisement

By comparison, just 2 per cent of Twitter Inc.’s float, and a similar amount of Snap Inc.’s, was on loan at the same point after their initial public offerings. For Facebook Inc., that percentage was 5 per cent.

Currently, the shares on loan from Facebook and Twitter total fewer than 1 per cent, and at Snap they’re nearly 9 per cent.

The percentage of shares on loan at Lyft is roughly equal to the level at Tesla Inc., the electric carmaker, whose chief executive has waged a very public fight with short-sellers, accusing them of conspiring to bring down his company.

Since making its public market debut Friday, Lyft’s stock has stumbled. Shares are trading at US$70, below Lyft’s IPO price of US$72 and off more than 20 per cent from their opening trade.

Lyft’s performance is not unusual. Facebook fell below its offer price during its first week, and Snap traded well below its opening price in its first week.

But the ride-hailing company’s debut was a test of investor appetite for fast-growing but unprofitable tech companies. While Lyft’s revenue more than doubled last year, it lost nearly US$1-billion, and a number of Wall Street analysts have questioned whether it can maintain its current growth trajectory.

The short-sellers are betting it can’t.

Report an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter