Shares of Lyft soar as company goes public

31 March, 2019, 10:42 | Author: Frank Williams
  • Close-up of logo for ride sharing and crowdsourced taxi service Lyft on a Lyft vehicle in the San Francisco Bay Area town of Daly City California

Well today we can report that by the time the listing had hit the NASDAQ, prices for (NASDAQ:LYFT) had swelled to $86.70 a share. Zimmer likened the displacement of auto ownership to cable television cord cutters.

"This is a pat on the back for ride hailing as a category", said Rohit Kulkarni, senior vice-president of research at Forge.

At that price, the IPO gives Lyft a market value of about $20.6 billion, based on the shares that were to be outstanding after the IPO, according to earlier filings.

"We are confident that the business will be very profitable", Green stated.

Lyft is in direct competition with the godfather of ride-sharing companies, Uber.

Lyft posted a loss of $911 million in 2018 versus $688 million in 2017, despite revenue doubling in 2018 to $2.16 billion. Both companies have been losing money, subsidizing rides to boost market share. Uber later added peer-to-peer ride haling to its app. Expect plenty of drama, from insane highs to deep disappointments, and all kinds of craziness in between featuring some of Silicon Valley's biggest unicorns such as Uber, Slack, Postmates, and Pinterest. Lyft drivers, meanwhile, "definitely aren't getting rich", Quartz noted. Beyond that, it has operations in the United States and Canada, with plans to expand internationally. All the signs before the listing looked good: the IPO was oversubscribed just two days into the marketing pitch, and Lyft ended up selling more shares than planned at the top of an already elevated price range.

The specter of Uber, which is expected to go public in April, also looms large.

Despite the optimism, there are also mounting concerns that these tech IPOs may be coming at the peak of the market, when the benchmark S&P 500 Index has risen more than 200 percent since 2008.

Co-founder Zimmer sounded upbeat.

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John Zimmer, Lyft's president and co-founder, says the road ahead comes with massive opportunities and genuine challenges.

But both companies face competition from other shared mobility companies.

Beyond solidarity for these specific actions, this employee also backs several of the proposals RDU is agitating for, including fair pay, transparency, an end to the contractor model that strips drivers of basic employee rights, and the ability to have a voice in the boardroom.

"This is a company that has negative cash flow, and but it's spending to juice revenue".

Reflecting strong demand, the number of shares to be sold was increased to 32.5 million from 30.8 million.

Co-founders Logan Green and John Zimmer talked about their early vision of the company and their commitment to providing alternatives to individual vehicle ownership.

Other big winners include some of the company's early investors, including General Motors with a stake worth $1.5 billion, and Alphabet, the owner of Google and Waymo, with a stake worth $1 billion.

Lyft said Friday it will invest $50 million annually, or 1 percent of profits - whichever is greater - in transportation initiatives in cities.

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