The shares fell by $9.28, or 11.9 per cent, to $69.01 in NY yesterday, below their offer price of $72 and well off the $88.60 peak hit on debut day on Friday. The next day shares gained modestly. Now if only Lyft could figure out a way to turn a profit. Well today the news has turned grim for the company as investors dumped the stock in droves.
Lyft priced 30.77 million shares at $72, compared with an expected range of $70 to $72. Though the ridesharing app made $2.2 billion in revenue in 2018, the corporation also had $911 million in losses as well. With Uber and Google's (^GOOG) autonomous auto project, Waymo, ramping up the pressure, Wedbush noted last week that an "arms race" will create a number of uncertainties for Lyft.
Snapchat was similar in that its profit strategy wasn't clear cut, however the app was a Silicon Valley darling at the time and its user numbers were very strong.
Lyft's fast swoon was reminiscent of Facebook's debut in May 2012.
The most recent round of private investing took place last June, with Lyft commanding an expected $15B valuation at that time.
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Shares of ride-hailing company Lyft Inc fell as much as 10.5 percent on Monday, below its initial public offering price of $72.
Lyft's (^LYFT) stock could use a lift.
Now Uber's decision to file after Lyft (or perhaps their inability to file before) has a bit of a cloud hanging over it.
Remember that Lyft has warned that the company's large financial losses may continue well into the future and that it might not ever reach true profitability. Uber too struggles to shore up its bottom line and most will probably draw useful comparisons between the two.
"Sticking with that playbook of owning this market (North America) and expanding in this market is how we get to deliver to our public shareholders and the long-term expectations that we set", Aggarwal said on the sidelines of Lyft's IPO celebration Friday.