A judge in California has ruled a ballot benefitting several app-based companies as unconstitutional
A California judge ruled a 2020 ballot measure exempting delivery drivers and ride-share employees from a state labor law, known as Proposition 22, unconstitutional on Friday. The measure was aimed at locking in these workers' status as independent contractors and not employees. For now, Proposition 22 remains in place, but the shift has put some weight on several major companies that rely heavily on gig-economy workers, including ride-share names Lyft Inc (NASDAQ) and Uber Technologies Inc (NYSE:UBER), as well as food delivery concern DoorDash Inc (DASH).
UBER is managing to brush off some of this shakiness this morning, last seen up 1.1% at $40.38, though earlier it hit a nine-month low. Its stock has been sinking since running up to the $52 level, pressured lowed by the 10-day moving average, and now sporting a 21.2% year-to-date deficit. Plus, last month's news that SoftBank was selling a third of its stake in the company didn't help matters. It's worth noting the security may have been overdue for a short-term bounce, however. This is per its 14-day Relative Strength Index (RSI) of 28, which is sitting firmly in "oversold" territory.
LYFT and DASH aren't faring as well today. The former was last seen down 0.4% at $45.70, while the latter is off 1.8% at $180.76. Lyft stock has seen a similar fate as UBER, with pressure at the 30-day moving average guiding the equity lower over the past few months to a 7.7% year-to-date deficit. Plus, the stock hit its lowest point since late January earlier today.
Puts on LYFT are running at double the average intraday volume, with 11,000 contracts across the tape so far, neck-and-neck with the 11,000 calls exchanged. The two most popular are the weekly 8/27 47-strike call and the 45-strike put, with positions being opened at both.
Meanwhile, DASH is the only one of the three sporting a positive return for the year, up 26.5% in 2021. The equity also recently reeled on news that SoftBank was selling its stake in the company as well. When we last mentioned DoorDash, its 40-day moving average was keeping some of these pullbacks in check. Today, the security is testing its footing at this moving average, though its threatening to close just south of here for the first time since early June.