The equity lending literature has assumed that equity loan supply is static due to institutional constraints. Instead, we show that reduced stock lending (both at the margin and in levels) causes increased stock loan fees and stock overpricing. We find the strongest effect among stocks with the highest disagreement, as suggested by theory. Investors buy and do not lend for two reasons. First, they prefer positive skewness: loan-supply-constrained stocks exhibit increased lottery-like return distributions. Second, loan supply restrictions cause short-term positive holding period returns, implicating them in stock overpricing.