Market Overview

Insider Selling At Ride-Hailing Companies: Uber Vs. Lyft

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Insider Selling At Ride-Hailing Companies: Uber Vs. Lyft

Ride-hailing stocks Uber Technologies Inc (NYSE: UBER) and LYFT Inc (NASDAQ: LYFT) haven’t gained traction in the market like early investors had hoped.

Both stocks have made new all-time lows within the past two months. Now that the lockup periods have expired for both ride-hailing stocks, investors are getting their first glimpse of what company insiders really think about the stocks at levels well below their IPO pricing.

Since Lyft’s lockup period expired in September, insiders have sold a total of 176,000 shares of Lyft stock worth roughly $8.29 million. Those 176,000 shares represent about 0.06% of Lyft’s 286.4 million outstanding shares.

In the just over two weeks since Uber’s lockup expiration, insiders have sold a total of 54.02 million shares worth roughly $1.48 billion. Those 54.02 million shares represent about 3.1% of Uber’s 1.71 billion outstanding shares.

Kalanick Cashing Out

On both absolute and relative terms, Uber insiders have been cashing out much more aggressively than Lyft insiders up to this point.

One of the most aggressive Uber sellers has been founder Travis Kalanick, who has sold 53.24 million shares so far in November worth roughly $1.46 billion, Kalanick has personally accounted for more than 98.6% of total Uber insider sales.

In Kalanick’s case, his aggressive selling may or may not be as bearish of a signal as it seems. Kalanick still owns about 45 million shares in Uber. While dumping more than half his holdings in a matter of weeks certainly isn’t bullish, Kalanick still has a sizable $1.3-billion investment in the ride-hailing company. In addition, he may have planned to liquidate this portion of his holdings well in advance of the IPO just to free up some cash for other endeavors.

Benzinga’s Take

While insider selling following lockup expiration is normal, the pricing of these sales may be the most troubling signal for ride-hailing investors. At Lyft and Uber’s current share prices, insiders are dumping shares at a 35% discount and 29% discount to the two companies’ respective IPO prices.

Do you agree with this take? Email feedback@benzinga.com with your thoughts.

Related Links:

Uber Short Sellers Are Cashing Out In Droves

Uber Founder Travis Kalanick Sells 20M Shares Amid IPO Lockup Expiration

Posted-In: ride-hailing Travis KalanickNews Insider Trades Trading Ideas Best of Benzinga

 

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