(Reuters) – Shares in Arm Holdings were down 6.1% on Tuesday, on track for their third decline out of the stock’s first four sessions as a listed company as investor interest faded in the biggest initial public offering for the year so far.

With short sellers looking to profit from the stock, it last traded at $54.46 after touching a high of $69 on Friday. The company, in which Softbank holds a roughly 90% stake, closed at $63.59 on Thursday, which was almost 25% higher than its IPO price of $51.

Data from analytics company Ortex on Tuesday suggested that short sellers had started taking bets against the stock with slightly more than 5 million shares of the newly listed chip designer “on loan,” or 2.7% of the stock’s free float.

Short sellers need to borrow a stock to short it, and the relationship between shares on loan and shorted is normally quite close, according to Ortex.

Initially with a new stock “there is often a lot of data missing, so there is a reasonable expectation that the real number is higher,” Ortex co-founder Peter Hillerberg said in an email.

Arm’s average cost to borrow, which is the interest rate for borrowing, is currently at 12.76%, according to Ortex. By comparison, a similarly shorted stock, Tesla, has a cost to borrow at 0.48%, Ortex said.

Arm’s higher cost to borrow “can be an indication that the demand to borrow, and short, the stock is high,” Hillerberg said.

Analysts from Bernstein and Needham had published less than optimistic notes about the chip technology company and options on the stock starting trading on Monday at a brisk pace with many investors positioning for further downside.

(Reporting By Lewis Krauskopf and Sinéad Carew; Editing by Chizu Nomiyama)

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