A few days ago we alerted you about the IPO of Lyft. Now we bring the results of the offering. American ridesharing company priced 32.5 million shares on Thursday at $72 each and raised about $2.34 billion.
Why is it important?
This spring, ridesharing companies have decided to go public. Uber, the main rival of Lyft, will conduct its IPO in April. The fact that the market has shown a strong demand for Lyft is a sign of the general confidence in this industry. In addition, other unicorns — Pinterest, Palantir, Postmates, and Slack — are to follow suit and land on the market later this year. All of this means that the IPO market has definitely revived in 2019 after a considerable period of the standstill.
The company sold more shares than it initially planned (32.5 million vs 30.8 million). The price it got was at the top of the expected $70-72 range. This allows us to say that the IPO was a success. The total value of Lyft after the offering is at about $25 billion.
Lyft’s financial results are mixed: both the revenue and losses are growing. At the same time, the firm expects the losses to decline in the future. The fact that the market has made a positive evaluation of the company means a lot. High demand shows that investors are looking beyond the current challenges and believe that ride-sharing will really represent an important element of our future life.
As for Lyft itself, analysts praise it for an attractive brand with social values and significant customer loyalty. The company is operating only in the United States and Canada, and such regional focus may emerge as its strong competitive advantage.
Lyft stock starts trading on the Nasdaq on Friday under the symbol “LYFT”. The elevated interest for the stock means bullish potential, although the volatility will surely be high after the start of trading and big swings in both directions are possible.