Shares of Lyft (LYFT) are up over 5% in early trading as Andrew Left's Citron Research stated in a new research report that the same short thesis that is being passed around on Lyft by the "amateur shorts" would have seen investors short Amazon (AMZN), Netflix (NFLX), Square (SQ) and others.
"Shorting disruptive companies that dominate a megatrend simply because they lose money is a sure way to go broke," contends the firm, which acknowledges in its report that the "principal of Citron has been an investor in Lyft for the past 2 years and we have increased our position in the open market."
The firm, best known for its short selling, outlines five reasons not to be short Lyft: growth in ridesharing; the fact that "Lyft is in a rare class of businesses along with Amazon and Alibaba where people use the service more and more over time"; evidence that millennials are foregoing car ownership for ridesharing; a "massive valuation discount" to Uber (UBER); and the fact that Lyft "can tell the story of Autonomous Driving and the future of margins." Reference Link
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