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Bailey McCann, Opalesque New York: Lyft shares have been on a bit of a ride since Friday's IPO. Shares were up 8.7% following their debut at $72 a share, only to tumble this week ending Wednesday at $70.
That volatility has also made Lyft shares the most expensive US equity to borrow, according to new data from IHS Markit. Tuesday, April 2 was the first settlement day for Lyft shares, which means short sellers are able to borrow shares to settle short sales. IHS Markit Securities Finance receives intraday reporting of borrow transactions from market participants, which allowed those contributors to see 1.56m shares in new borrows yesterday which were lent out at just over 100% annualized fee.
Overnight settlement reports show 6.61m shares reported as on-loan, with a market value of $455m, which serves as the best proxy for the current short position.
"New IPOs often attract short sellers, who seek to capitalize on falling momentum after an IPO. Timing is the key, which is why short sellers are often willing to pay extraordinary borrow fees for IPOs," said Sam Pierson, securities finance analyst at IHS Markit, in a note Wednesday. Analyst notes on Lyft this week have been largely negative, putting pressure on Lyft shares. New York City also announced a congestion pricing scheme which will make individual rides throughout the city more expensive, a move that could limit ridership through popular rideshare apps like Lyft and Uber.
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