Short Sellers Already Piling Into Uber

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

Shorts Digging In

S3 analyst Ihor Dusaniwsky said Wednesday that Uber short interest has already jumped to $846 million. The net Uber short position is up to 21.8 million shares, about 11.7 percent of the stock’s float. Dusaniwsky said stock borrow rates are falling and should dip below 2 percent by the end of the day.

“We’re seeing large blocks of stock being borrowed today, [and] with this size of stock trading hands and more availability on the street than originally anticipated we are expecting stock borrow rates to ease slightly, dipping below the 2% fee level today and possibly nearing 1% fee over the next few days,” Dusaniwsky wrote.

He said Uber short selling may ramp up in the days ahead as momentum traders pile in now that Uber is definitively in the red following its IPO.

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.

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

Photo courtesy of Uber.