Lyft hit a fresh 52-week low Monday as uncertainty surrounding its valuation continued to prompt shareholders to bet against the company, with larger rival Uber (NYSE:UBER) set to steal the ride-sharing limelight ahead of its listing in May.
When it comes to Lyft (NASDAQ:LYFT), investors have seemingly adopted the mantra "when in doubt stay on the sidelines or sell." According to financial analytics firm S3 Partners, 75% of the free float of Lyft's shares are held short, Bloomberg reported. The uncertainty over the ride-sharing company's valuation saw its shares fall as much as 6.8% on Monday, to a record low of $55.56.
Heading into a fresh trading week, reports that the company was pulling thousands of electric bikes in New York, Washington and San Francisco following complaints about stronger-than-expected braking on the front wheel has also made investors think twice about backing the stock.
Lyft is now more than 20% down from its IPO price of $72.
"We believe there could be continued pressure on Lyft shares while investors wait for Uber’s roadshow and dig further into the full financial metrics,” Wedbush Securities wrote in a note on Friday.
Uber filed its IPO prospectus last week, in which it warned that it may never turn profit and identified intense competition in the market as a risk factor, saying it may have to further lower its rates and offer greater incentives for both drivers and consumers, both of which may squeeze margins. It also reported 2018 revenue of $11.27 billion compared with Lyft’s $2.2 billion.
Lyft shares accelerated after Uber released its IPO prospectus last week, despite some analysts agreeing that it was difficult to compare the two companies as Uber boasts a far more complex model.
"And now that Uber’s S-1 was released ... we think investors don’t yet have a whole lot more clarity on some of the key comparable metrics,” Wedbush added.