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Some other stories on this: https://nypost.com/2019/04/05/lyft-threatens-morgan-stanley-with-legal-action-over-ipo-claims/ https://nypost.com/2019/04/05/lyft-t

Some other stories on this: https://nypost.com/2019/04/05/lyft-threatens-morgan-stanley-with-legal-action-over-ipo-claims/ https://nypost.com/2019/04/05/lyft-threatens-morgan-stanley-... https://techcrunch.com/2019/04/05/morgan-stanley-which-is-underwriting-ubers-ipo-is-denying-reports-that-it-marketed-a-short-selling-product-to-lyft-investors/ https://techcrunch.com/2019/04/05/morgan-stanley-which-is-un... https://www.theinformation.com/articles/lyft-threatened-morgan-stanley-with-legal-action-over-short-selling-trades https://www.theinformation.com/articles/lyft-threatened-morg... The NYPost story includes the detail "We bought stock in a special acquisition vehicle and then the individual investors in the special acquisition vehicle shorted shares through Morgan Stanley ... Pre-IPO investors are contractually barred from reducing their “economic interest” in Lyft for six months, which includes shorting the stock. But sources say Lyft investors worked around the lock-up language by positioning the bets so that they won’t benefit from a decline or a rise in the stock. Instead, they simply lock in their IPO gains, which were significant."

bobcostas55 8y ago
>positioning the bets so that they won’t benefit from a decline or a rise in the stock. Instead, they simply lock in their IPO gains Sounds like they were reducing their economic interest.
naveen99 8y ago
Does that mean pre-ipo investors can sell call options (when available) at the strike price = ipo stock price of $72 ?
- tehlike 8y ago
  Option contracts are not available yet, i think.
  - bardworx 8y ago
    They were released on 4/4, I believe. You can purchase them from your broker.
ackbar03 8y ago
Finance at its best.
fnpiop 8y ago
The nypost's articles are being written by reporters who don't understand what they are writing. The same authors wrote the original article ("https://nypost.com/2019/04/01/early-lyft-investors-are-betting-on-the-new-stock-falling/" https://nypost.com/2019/04/01/early-lyft-investors-are-betti...) which is full similar errors. Obviously, if the investor engages in a transaction that leads to them to not benefiting from a rise in the stock, they've reduced their economic interest! The answer (as I note elsewhere) is that the investors believe Lyft's lock-up language does not per se bar them from reducing "economic interest". The loose agreement only bars selling and presumably short-selling shares.
- NelsonMinar 8y ago
  Hacker News: where anonymous commenters ask you to believe them over the professional financial reporter. You've put your finger on the core of the legal dispute, what "reducing economic interest" means. The reporter did an excellent job explaining that. Now it'll be up to a court to figure it out.

bobcostas55 8y ago

>positioning the bets so that they won’t benefit from a decline or a rise in the stock. Instead, they simply lock in their IPO gains Sounds like they were reducing their economic interest.

naveen99 8y ago

Does that mean pre-ipo investors can sell call options (when available) at the strike price = ipo stock price of $72 ?

tehlike 8y ago
Option contracts are not available yet, i think.
- bardworx 8y ago
  They were released on 4/4, I believe. You can purchase them from your broker.

ackbar03 8y ago

Finance at its best.

fnpiop 8y ago

The nypost's articles are being written by reporters who don't understand what they are writing. The same authors wrote the original article ("https://nypost.com/2019/04/01/early-lyft-investors-are-betting-on-the-new-stock-falling/" https://nypost.com/2019/04/01/early-lyft-investors-are-betti...) which is full similar errors. Obviously, if the investor engages in a transaction that leads to them to not benefiting from a rise in the stock, they've reduced their economic interest! The answer (as I note elsewhere) is that the investors believe Lyft's lock-up language does not per se bar them from reducing "economic interest". The loose agreement only bars selling and presumably short-selling shares.

NelsonMinar 8y ago
Hacker News: where anonymous commenters ask you to believe them over the professional financial reporter. You've put your finger on the core of the legal dispute, what "reducing economic interest" means. The reporter did an excellent job explaining that. Now it'll be up to a court to figure it out.