CBOE Holdings Inc.

05/15/2019 | Press release | Distributed by Public on 05/15/2019 09:24

Short Sellers Already Piling Into Uber

Cboe - Market News Story

Short Sellers Already Piling Into Uber

Wayne Duggan 5/15/2019 9:50:23 AM

Roughly a month after short sellers took massive positions after the IPO of Lyft Inc (NASDAQ: LYFT), the latest numbers from financial analytics firm S3 Partners suggests short sellers are already focusing their attention on Uber Technologies Inc (NYSE: UBER).

Shorts Digging In

S3 analyst Ihor Dusaniwsky said Tuesday that Uber short interest has already jumped to $768 million. The net Uber short position is up to 20.7 million shares, about 11.5 percent of the stock's float. Dusaniwsky said stock borrow rates are between 3 percent to 5 percent, but could be on the rise as short sellers add to their positions.

'If short interest does continue to climb we can expect short borrow rates to rise in lockstep and reach double digit fees over the next day or two,' Dusaniwsky wrote.

He said Uber is following a familiar path for technology IPOs in which short interest and borrow rates rise steadily throughout the first two weeks of trading until the lending inventory recovers from the initial wave of short selling.

Short Sellers Hitching A Ride

So far, Uber hasn't experienced anything like the spike in fees Lyft short sellers dealt with out of the gates. Lyft's borrow fees initially spiked above 100 percent before ultimately settling below 5 percent. After just two weeks of trading, Lyft's short interest had climbed to $944 million, or about 64.7 percent of its float. Sp far, short sellers haven't been nearly as aggressive with Uber.

The short ridesharing trade has worked out so far for traders able to get in early. Lyft stock is now trading 28.3 percent below its IPO price, while Uber is down 12.5 percent from its IPO price.

Uber's stock traded around $40.46 per share at time of publication.

Related Links:

Newly Public, Cash-Burning Uber Finds An ETF Home

It Didn't Take Long For Short Sellers To Pile Into Lyft

Photo courtesy of Uber.