Lyft closed the trading day at $8.46 — its lowest price since joining the New York Stock Exchange in early 2019. At the start of the pandemic, Lyft stock bottomed at around $14.68, close to 50% above its price today. One would assume this might be the bottom for Lyft stock, but it could go lower, making it a difficult gamble for those with a short-term investment horizon.
I own Lyft stock. I bought it for under $10 twice recently. However, it was for a medium to long-term investment horizon. The problem short-term for Lyft is that it has a short float of 15.99%, aka a lot of short interest. That doesn’t mean the stock can’t bottom, but for context, I’ve never bought a stock to trade short-term with a short float nearly that high. Ideally, the short float is below 5%.
The lower the overall market cap for a stock, typically the higher the short float. You won’t see Alphabet stock with a short float of 15% for instance. But 15% is high for any medium-cap stock and certainly a medium-cap tech stock given the volatility of tech stocks lately.