A video sign displays the logo for Roku Inc, a Fox-backed video streaming firm, in Times Square after the company's IPO at the Nasdaq Market in New York, U.S., September 28, 2017. REUTERS/Brendan McDermid

SAN FRANCISCO (Reuters) - Traders on Tuesday were "clamoring" to borrow shares of Roku ROKU.O 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 10.5 percent to $21.08 on Tuesday, bringing their decline to 20 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 51 percent from the $14 price set in its initial public offer on Wednesday.

Based on its 2016 growth rate, Roku’s annual revenue could reach $623 million in 2018, putting its current stock price at about 3.2 times revenue, a level that appears expensive compared to other Silicon Valley consumer electronics makers.

Roku's shareholders include Menlo Ventures, Fidelity and Rupert Murdoch’s Twenty-First Century Fox FOXA.O.