LYFT Inc (LYFT)

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Lyft (LYFT) Stock Slides On Pricing Strategy
By: Schaeffer's Investment Research | August 9, 2023

• Lyft is brushing off strong second-quarter results

• Lyft is struggling to keep up with rival Uber

Despite upbeat second-quarter results and a strong current-quarter forecast, Lyft Inc (NASDAQ:LYFT) stock is sliding today as its price war with Uber (UBER) takes the spotlight. Lyft said it will double down on competitive pricing to catch up with its rival, after already lowering fares and cutting costs under new CEO David Risher. The stock is brushing off no fewer than nine price-target hikes as well, with just two analysts cutting their price objectives.

At last glance, LYFT was down 6% at $10.86. The shares are on track to snap a three-week win streak by the end of this week. On the short sell restricted (SSR) list amid the volatility, the stock sinking below its year-to-date breakeven level.

So far today, 64,000 calls and 27,000 puts have traded hands -- four times the intraday average options volume. The weekly 8/11 11-strike call is the most active contract by far, with new positions being opened there.

Options traders were quite bullish ahead of today too. Lyft stock's 50-day call/put volume ratio of 1.53 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 93% of readings from the past year. An unwinding of some of this optimism could create headwinds for the shares as well.

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