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Home / Business / Lyft stock, down 20% since IPO, set to fall more with short selling

Lyft stock, down 20% since IPO, set to fall more with short selling



Lyft's stock price has sputtered since the ride-hailing company started trading on Friday, and could even stall even further when the IPO dust settles, a Wall Street data analytics firm is warning.

S3 Partners, which tracks short interest data, said in a report Monday that it expects further to decline.

"With IPO shares not settled yet and therefore not in stock lending programs, and SEC regulations prohibiting IPO underwriters from lending out their shares to cover short sales for 30 days are the result from short sales, "Ihor Dusaniwsky, managing director of predictive analytics at S3, said.

Shares of Lyft started trading on the Nasdaq on Friday at $ 87 apiece before sinking into the red to end the week down 1

0%. Monday, the stock's first full day of trading, saw shares slide another 6.7% to $ 69- and the sell-off continued overnight into Tuesday.

"When the LYFT IPO shares begin settling tomorrow and lending programs see their lendable inventories grow over the next few days, we are looking at a lending short sale and LYFT short selling," Dusaniwsky said.

"We can expect further weaknesses when the shorts are allowed to pedal to the metal and redline their trading strategies."

Wall Street analysts.

Wall Street analysts.

Options contracts that are expected to launch on Thursday, Chicago-based Cboe Global Markets said in a press release on Monday.

Wall Street analysts Targeted at a reasonable valuation, with an average price target of $ 71, or roughly 4% above Tuesday's prices.

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