Lyft IPO Enthusiasm Drives Up Founder Stakes to $1.4 Billion

Lyft IPO Enthusiasm Drives Up Founder Stakes to $1.4 Billion

Lyft IPO Enthusiasm Drives Up Founder Stakes to $1.4 Billion

"Without question, investors are looking beyond operating losses to the potential upside", in the ride-hailing industry, said Alejandro Ortiz, an analyst for SharesPost.

The No 2 United States ride-hailing raised about US$2.34 billion in the biggest offering by a USA tech startup since Snap Inc went public two years ago, and the largest so far this year.

Lyft says it has a 39% share of the ride sharing market in the U.S., up from 22% in 2016 but still below Uber which is still the industry's biggest player. Lyft started its IPO investor road show earlier this month with a target range of $62-$68 per share.

Lyft is raising some $2.5 billion in its Wall Street offering, which is seen as a turning point for the ride-hailing business and the so-called "sharing economy". To date, the company has facilitated over a billion rides.

Lyft's IPO sets the stage for the stock market debut of larger rival Uber Technologies, which sources have said is coming in April. Uber is expected to make an even bigger splash when it completes its IPO later this year. "The tech IPOs are really going to get the market moving". Including the overallotment and at the maximum price, the entire offering is now valued up to $2.55 billion. The IPO has significantly lifted the value of Lyft from its previous valuation of $15.1 billion. It posted a loss of US$911 million in 2018 versus US$688 million in 2017.

Lyft told potential investors that it expects its expenses to decline next year, according to people who were present for one of its pitches.

The initial public offering (IPO) has made multi-millionaires of the seven year old company's founders, Logan Green and John Zimmer.

As of writing, Lyft has indeed gone public, and its stock price has far exceeded early estimates: when shares begin to sell, their price leaped up to roughly $87 each, which temporarily bumped Lyft's market cap up to $30 billion.

JP Morgan Chase & Co led the offering with Credit Suisse Group AG and Jefferies Financial Group Inc. It's concentrated on being a stable transportation-focused company and hasn't experienced the same amount of turmoil as Uber, which generated so many bad headlines that a #DeleteUber movement cropped up two years ago.

The real test will come when the stock hits the public market for its first day of trading -- and beyond.

Ives called Lyft's stock market debut a "watershed" event for the tech sector and ridesharing industry that he saw as "one of the most transformational growth sectors of the U.S. consumer market over the past five years".

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