(Adds quote, detail from S3, share move)
SAN FRANCISCO, Oct 3 (Reuters) - Traders on Tuesday were "clamoring" to borrow shares of Roku in order to sell them short following the video-streaming company's initial public offer last week, according to S3 Partners.
Shares of the Los Gatos, California company dropped 8.3 percent to $21.60 on Tuesday, bringing their decline to 18 percent in the past two sessions.
"With short sellers clamoring for short locates, stock borrow rates have increased from the 20-percent fee level to over 65-percent fee for some trades we've seen done today," Ihor Dusaniwsky, S3 Partners head of research, said in an email.
So far, about 2 million shares of Roku have been sold short, according to the financial analytics firm.
Riding a wave of consumers abandoning cable TV and switching to online content while facing competition from larger rivals, Roku remained up 54 percent from the $14 price set in its initial public offer on Wednesday. (Reporting by Noel Randewich; Editing by James Dalgleish)