Lyft was not the first company to engage in the ride. However, it is ready to become the first listed company, and investors' appetite for its stock has proved tremendous.
The company traded its shares at $ 72 on Thursday after its price range was increased given strong demand from potential shareholders. As a result, Lyft's value is over $ 24 billion as trading on the Nasdaq stock market begins Friday under the ticker symbol LYFT.
In total, the company raised about $ 2.3 billion, which increased the number of shares sold. (This amount could increase if Lyft's insurers sell an additional block of stock to cover even stronger than expected investor demand.)
Among the first to follow in Lyf's footsteps is the oracle of Uber, whose IPO is expected to be the largest in the coming months. Others on the list are the digital wallet company Pinterest, the messaging platform Slack and Postmates, and everyone is counting on their enthusiastic support from investors.
"said Jay Ritter, a professor at Warrington College of Business, University of Florida, with a designation for start-ups worth at least $ 1 billion.
However, some investors fear that these companies [19459010FloodinginredinkItisunlikelythatprofitshavebeenmadeforyearsovervaluedandultimatelydisappointingnewpublicfinanciersandsomecompaniesthatwentpublicwithlargelossesincludingGrouponandSnaparenowtradingwellbelowitsIPO
In its bid prospectus, Lyft announced that it had lost nearly $ 1 billion in 2018. Lyft and Uber regularly lose money to gain new markets in which they receive ample subsidies to drivers and drivers The companies are also burning money for other transportation initiatives such as bicycles, scooters and autonomous vehicles Lyft is the largest bicycle-sharing company in the United States for around $ 250 million.
"Obviously Lyft says the market:" We are ready to give you the doubt of things, "as there are great uncertainties about the future," said Ritter.
On its Initial Public Offering Due to the market value of Lyft, the price of classic cars like Ford Motor. It's a significant increase over the $ 15.1 billion that Lyft earned in the last private fundraising round.
Over the last week and a half, Lyft executives and their bankers have embarked on a roadshow that took them from New York to New York to Kansas City in San Francisco, where they showcase their business to institutional investors. Lyft initially set a price range of $ 62 to $ 68 for his stock, before he raised that range to $ 70 to $ 72 on Wednesday. The offer was led by JPMorgan Chase and Credit Suisse.
Between 2001 and 2018, IPOs above their original price level returned an average return of 37 percent, Ritter said.
But Lyft must now prove that this is the case, worth the obvious valuation it has received from its new public investors. This challenge involves maintaining the enviable growth rate, which more than doubled revenue in 2018, and shows that focus on transportation, rather than branching out into more and more businesses such as Uber, may be lucrative.
The success of the offer will bring to the largest existing investors of Lyft Wind blows. Among them: the company's founders, Logan Green and John Zimmer, who are ready to be worth hundreds of millions of dollars. Rakuten, the Japanese e-commerce giant; and venture capital firms like Andreessen Horowitz.
Although Mr. Green and Mr. Zimmer bring their company to the public, they will continue to be in control by following a long tradition of technology companies with founder leadership. The two own special holdings, which account for almost 49 percent of the voting rights, although they own less than 5 percent of the total shares.
Lyft plans to also drivers who have completed a large number of trips the company, so they can buy shares in the IPO price. Riders with 10,000 rides receive $ 1,000, which makes it possible to purchase 13 pre-tax shares for a price of $ 72. Drivers who have completed 20,000 trips receive $ 10,000.
Only full-time riders who've been on the platform for several years are likely to cut, said Harry Campbell, a Uber and Lyft rider running the driver blog and resource site The Rideshare Guy.
"It was the right thing," he said of Lyft's cash bonuses for drivers. "If you gave 10,000 rides to Lyft, you've actually made a significant contribution to building this company." He added that the I.P.O. was "somehow exciting" for the drivers (19659002).
Unlike Lyft employees and early investors, who are restricted by the sale of their shares through a vesting period, drivers can sell any of the Lyft shares acquired under the cash bonus program once the company is active in the public market begins, according to an e-mail to the qualified driver, which was reviewed by the New York Times.
However, the cash bonuses did not ultimately convince many drivers who work as freelancers for Lyft and Uber and do not receive full-time work. Hundreds of them protested this week in lower San Francisco and Los Angeles for lower wages.
"If the political will against Uber and Lyft begins to change, that's a scary proposition," Campbell said.