Investors hitch a ride on Lyft's IPO at $72 a share

Investors hitch a ride on Lyft's IPO at $72 a share

The stock opened at $87.24, up 21 per cent from its offering price of $72. "The brand loyalty of Lyft has been quite impressive as the company continues to attract drivers and riders with its brand associated with corporate responsibility and social values [;] an impressive formula to go after the $1.2 trillion [U.S. transportation] market". Uber is expected to publicly file for its offering in April, kicking off a listing that could make the company worth as much as $120 billion, people familiar with the matter have said.

Co-founder and CEO Logan Green said in the early days of the company, he was told he was insane to think people would ride in each others' personal vehicles. Lyft started its IPO investor road show earlier this month with a target range of $US62-$US68 per share.

"It's good news for them to see that the market has a huge appetite for IPOs", said Reena Aggarwal, director of the Center for Financial Markets and Policy at Georgetown University. "We don't know how the stock will perform in the long term, but this morning feels like the first step in a potentially historic year for IPOs".

The success of the IPO came despite Lyft's steep loses, criticism of its dual-class share structure and some concerns over its strategy for autonomous driving, for fear of missing out on the company's strong revenue growth.

Lyft's long-awaited debut on a US stock exchange proved to be a success Friday, with the stock closing up 8.7% at $78.29 a share, giving the ride-hailing pioneer a $26.6 billion valuation after its first day of trading and auguring a warm welcome for other tech decacorns that have shunned the IPO pipeline for years. The shutdown of the federal government shuttered United States agencies that review IPO plans, and this must have delayed the rush of 2019 activities but the Lyft case has shown there is heightened enthusiasm for more offerings that are likely to come.

Lyft's founders, Logan Green and John Zimmer, now hold stakes valued at $675 million and $415 million, respectively.




Lyft co-founder and president John Zimmer speaks at a Leaders in Technology dinner during the 2018 CES in Las Vegas, Nevada, U.S. January 10, 2018. The service quickly developed a reputation as the friendlier alternative to Uber.

Lyft however kept their focus only on consumer transportation.

Lyft, a company that has lost $2.2 billion since 2016 and has never turned a profit, is already in heady company as far as investors are concerned. (LYFT) launched its initial public offering on Friday, March 29, and by going public, the company plans to reinvest in the communities it serves.

Both Lyft and Uber have been criticized for causing congestion in cities and creating hazards to bicyclists and pedestrians.

Even so, Lyft's revenue per ride has been increasing, so some analysts see the company as headed in the right direction.

Bussewitz reported from NY.

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