Uber’s shares have tumbled since its Friday IPO, and short sellers are betting the stock will fall further.
The fees to borrow Uber’s shares — the method used for shorting them — falls somewhere around the 5% range. That’s a relative bargain.
It’s a sign short demand is lower than for other tech giants. Lyft after its IPO was the most expensive stock to short.
Traders are piling into $768 million worth of bets that Uber’s stock will fall even further, after the ride-hailing giant posted the biggest first-day dollar loss in US IPO history.
Uber’s shares have tumbled since the company listed them publicly on Friday. Market watchers have been awaiting data showing the first signs of short demand in the stock, especially after short sellers pounced on rival Lyft’s IPO.
But it could have been worse. Initial data trickling in from analytics firms S3 Partners and IHS Market say that the fees to borrow Uber’s shares — the method used for shorting them — falls somewhere around the 5% range.
That’s a bargain, relatively speaking, and could be a signal that demand for short bets are lower than expected. Just look at Lyft’s trading debut about six weeks earlier. …read more
Source:: Businessinsider – Finance