Published: Sat, March 30, 2019
Money | By Ethel Goodwin

Lyft to cruise onto Wall Street with stock market debut

Lyft to cruise onto Wall Street with stock market debut

Lyft had little trouble getting investors to hop on board its increasingly popular ride-hailing service, as its initial public offering fetched a $72 United States per-share price that exceeded even its own expectations.

Lyft's IPO sets the stage for the stock market debut of larger rival Uber Technologies Inc, which Reuters has reported will kick off in April. Uber has been told by its investment bankers that it could be valued at as much as $120 billion. Lyft also said it ended up selling 32.5 million shares in the offering, above the almost 31 million that it had targeted in its regulatory filings leading up to Thursday evening's pricing. The firm now expects to price its 30.77 million shares in the range of $70 to $72, up from the previous range of $62 to $68.

After a chilly start to 2019 for US IPOs as the federal government shutdown stymied activity, Lyft's success could light a fire under a market that's likely to welcome Uber Technologies Inc, Pinterest Inc and Slack Technologies Inc - to name a few - before the end of the year.

Public market investors, keen on Lyft's revenue growth and after enduring a long stretch with few IPOs from highly valued tech companies, piled into the offering. The company also has a network of shared bikes and scooters in various cities, including Los Angeles, Nashville, San Antonio, Chicago and NY. According to Reuters, the company's ten-day IPO roadshow, started on March 18, was oversubscribed after just a couple of days.

Interestingly, Tech Crunch notes that Lyft has the largest net losses of any pre-IPO business, posting losses of $911 million on revenues of $2.2 billion past year.

During that time, its losses also grew, from US$688 million in 2017 to US$911 million past year.

The stock opened at $87.24 but later pared gains to close up 8.7 percent at $78.29, giving Lyft a market capitalization of around $22.2 billion. The company officially morphed into Lyft as we know it in 2012, casting itself as a friendly fist-bumping service whose cars wore big furry pink mustaches on the front bumper.

Lyft's top investors include General Motors, Ben Horowitz for Andreessen Horowitz, Carl Icahn and Jonathan Christodoro of Icahn Enterprises, Sean Aggarwal, Hiroshi Mikitani for Rakuten and Valerie Jarrett.

"It will be years before they turn a profit".

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