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Lyft Shares Continue to Slide as Short Bets Keep Piling Up

Esha Dey
Lyft Shares Continue to Slide as Short Bets Keep Piling Up

(Bloomberg) -- Lyft Inc. shares continued to drop on Monday, driving the stock 22 percent below the IPO price.

Investors in the ride-sharing company have now seen the stock decline in seven of its 12 trading days since going public late last month. While volatility soon after a trading debut is not unusual, Lyft has already faced particular skepticism about its ability to briskly expand market share and make money. Lyft shares sold off sharply after larger rival Uber Technologies Inc. filed for an initial public offering last week, as investors will soon have another option to bet on the potential of ride-sharing and gig-economy.

Meanwhile, short investors have already begun racking up positions. According to financial analytics firm S3 Partners LLC, there has been active short selling in Lyft shares, with a staggering 75 percent of the free float held short.

In a report published on April 12, S3’s managing director of predictive analytics Ihor Dusaniwsky said Lyft short sellers have fared better than post-IPO long shareholders. Shorts were up $43 million in mark-to-market profits on Friday, bringing their post-IPO profits to $202.4 million, Dusaniwsky wrote.

Lyft shares were down as much as 6.8 percent on Monday, touching a record low of $55.85 against the $72 IPO price. On Sunday, Reuters reported that the company was pulling thousands of electric bikes in New York, Washington and San Francisco following complaints about stronger than expected braking on the front wheel.

To contact the reporter on this story: Esha Dey in New York at edey@bloomberg.net

To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Scott Schnipper

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