By Caroline Valetkevitch
NEW YORK (Reuters) - Shares of online retailer Zulily Inc shot up more than 8 percent on Wednesday, rebounding after dropping to a record low earlier in the day following the expiration of its lockup period.
The initial public offering share lockup for Zulily - which went public in November - expired Wednesday, according to Nasdaq's Web site.
Traders said short-covering likely bumped up the stock after it hit a low of $28.75 earlier in the day. The stock was up 8.6 percent at $34.78 in afternoon trading on volume of about 8.3 million, about four times its 10-day moving average volume
During an IPO lockup, insiders or those holding majority stakes are forbidden from selling shares. The expiration of the lockup removes those trading restrictions.
Last week, Twitter shares sank to a new low following the expiration of its IPO lock-up period.
Zulily said in its most recent filing with the SEC that as of March 30, about 110,915,025 shares of Class A common stock issuable upon conversion of outstanding Class B common stock will become eligible for public sale after the lockup expires in mid-May.
The stock opened at $39 in its trading debut on November 15, above its IPO price of $22. The company is one of several new public offerings that has struggled to stay above its first-day price, with many Internet-related and tech shares losing ground in a recent selloff.
Options volume on Zulily's stock was active, with more than four times the usual volume and bearish activity outpacing the bullish - about 6,266 calls and 13,000 puts traded so far, according to options analytics firm, Trade Alert.
(Additional reporting by Angela Moon; Editing by Chizu Nomiyama and Bernadette Baum)