fnpiop

Unfortunately, the actual agreements generally aren't public information. I can't provide mine without risk of loss of anonymity.

Yes, this is a lame answer, but any viewer who has Lyft stock or has friends that do can verify for themselves.

If things really go sour, you can have massive lawsuits. Discovery process with brokers could expose who shorted.

EDIT: I actually read the S1 excerpt wrong.

Update: Note that it is carefully worded: "Our directors, executive officers and holders of a substantial portion of our capital stock and securities convertible into our capital stock".

What probably happened is that the company required holders of only a "substantial portion" of stock to sign updated agreements with the underwriters. Neither I nor any of my Lyft stockholding friends ever entered into such an agreement (and Lyft isn't claiming that we, as minor shareholders, did). So as far as I can tell, nothing blocks us from hedging with Morgan Stanley or otherwise.

(Original post was thinking the S1 is wrong; it is not)

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-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.

Even though Morgan Stanley denies short-selling, I'm really trying to understand the legal issue they'd be under even if they were.

The various news articles are terribly written (esp. the original nypost article), so here's what I can tell as someone with some knowledge of Lyft stock:

* Lyft's market standoff agreement is written loosely. Often such agreements enumerate a wide range of prohibited behaviors with the underlying stock during the lockup, banning all sorts of direct or indirect sells, hedges, hypothecation, etc. of the underlying stock. Lyft merely bans "selling or otherwise disposing" the company stock.

* Lyft has claimed (in emails to investors) that any transaction that transfers "economic interest" of the stock are prohibited.

So:

1. Via "https://nypost.com/2019/04/05/lyft-threatens-morgan-stanley-..., It looks like Morgan Stanley might have created a vehicle/security that inversely tracks Lyft. So the Lyft investors aren't per se shorting Lyft; MS is. This toes the line (as it is an indirect short), but I'd love to see legal experts weigh in.

2. Even then, I'm finding Lyft's position hard to rationalize. How does an agreement to ban sales bar any form of economic interest reduction? (e.g. buying puts, writing calls, hypothecating, etc.) I would think investors could execute equity collars on their Lyft position all they want per the agreement (and Morgan Stanley could be their counter-party), but Lyft is claiming otherwise.