On the day that Lyft (NASDAQ: LYFT) co-founder and President John Zimmer suggested that the stock was a buy, insiders at the ride-hailing firm including himself did the opposite – sell.
According to SEC filings published last week , Lyft insiders sold a total of 137,000 shares combined on November 20th. Speaking to CNBC, Zimmer had on the same day billed Lyft’s stock as a good buy calling it ‘undervalued’:
I feel like the stock is undervalued. We’ve had three quarters of beating expectations, and over time people will see us put up more numbers and it will solve itself.
Editor’s Note (11/26/2019): A PR rep reached out with a clarification, insisting:
These shares were automatically sold to cover tax withholding obligations in connection with the vesting of restricted stock units, and this sale does not represent a discretionary trade by the Reporting Person.
Despite his statement, Zimmer went on to sell the largest chunk of shares relative to other insiders. He disposed of 39,037 shares at $43.60 netting him slightly over $1.7 million. As of last week, Zimmer’s stake in the ride-hailing firm consisted of 1,240,396 shares of Class A Common stock. Based on Friday’s closing price of $46.41 , the stake is worth approximately $57.6 million.
Since Zimmer suggested that the stock is a buy, Lyft’s shares have gone up by around 6%. The stock closed at $43.95 on November 20th while Friday’s closing price was $46.46.
Lyft’s co-founder and CEO Logan Green was the second-largest seller among insiders on the same day. He disposed of 38,952 shares at $43.70 and this earned him approximately $1.7 million. As of Friday, the remaining number of shares that Green owns is just 85 more than Zimmer.
Other insiders who sold the stock on November 20th include Lyft’s CFO Brian Roberts. He sold 17,589 shares at a price of $43.7985.
Lyft’s executive vice president and chief product officer Ran Makavy, as well as general counsel & Secretary Kristin Sverchek, sold 31,862 and 9,410 shares respectively. A director of the on-demand transportation firm Mary Wilderotter also disposed of 559 shares.
Combined the insiders earned slightly more than $6 million from the sale. This comes at a time when Lyft has lost billions of dollars in market cap following its IPO.
Since going public in late March at a price of $72 a share, Lyft’s stock has fallen by around 35% as of Friday’s close. Just like its rival Uber, it is one of the worst-performing IPOs of 2019. The stock hit a record low of $37.07. It has gained around 25% from the record low registered last month. In the third quarter, Lyft reported a net loss just like in the second quarter and the quarter prior.