Another Ride-hailing company goes public today at $72/share, Lyft becomes the world’s number 2 ride-hailing enterprise with a valuation of about $20 billion.
Lyft will also be sending cash bonuses to its senior drivers as a gesture of thanks to them for having faith in the company. It is yet to be seen that how many of Lyft’s 1.9million drivers are going to receive a bonus, however, the expectations are a driver with over 10,000 trips will get the incentive.
The share price of the company is higher of expectations of investors and last year most of them were expecting Lyft to be valued at less than $15bn and initial per share pricing to between $62 and $68
The road shows were conducted by the company to raise interest in IPO, a strong number of the crowd was gathered leaving very less capacity of venues Lyft presented at.
Overall, the price is raised because investors early response was more positive than it was expected. Wedbush securities start coverage with a price target of $80, and D.A. Davidson has given a buy rating and a $75 price target.
Lyft still doesn’t make money, lost nearly a billion dollars in 2018
It is also is the discussion that Lyft doesn’t make money for the time being and yet claims 39 percent market share. When they started two years ago they only had 22 percent portion of United State market, if we are to believe this Lyft is making massive progress in the U.S.
Last year Lyft lost $911 million dollar on $2.2bn revenue, and to protect its valuation company will be required to show progress. Some investors are looking at the firm’s real-life numbers and aren’t quite caught up in the hype quite yet.
Alan Patricof is a well-known venture capitalist and advised investors to, “exercise caution” in regards to the upcoming IPOs of Lyft and Uber. He stated there has been an unhealthy amount of “irrational exuberance.” with recent large tech-IPOs.
They’re not focusing as much on the metrics … what the revenues are and the losses are
– Alan Patricof, managing director of Greycroft Partners
Furthermore, Intel estimate that market worth of autonomous will be $50 trillion by 2050. That means Lyft will be directly competing again Uber to launch auto-drive taxi service especially after the acquisition of Careem. Lyft is partnered with Aptiv to automate its ride and so far completed 35,000 rides in Las Vegas NV.
Shares will hit the NASDAQ tomorrow and will trade under the ticker ‘LYFT’. J.P. Morgan, Credit Suisse, and Jefferies became lead underwriters of the offering.