Lyft's IPO reportedly prices at $72 per share, leading stampede of tech unicorns

Ride sharing giant Lyft came to the market on Thursday, as the company beat rival Uber to the market in one of the biggest and most closely watched initial public offerings of the year.
The company began trading on the Nasdaq at $72 per share, according to a report in The Wall Street Journal, giving Lyft a valuation of over $20 billion in the booming market for car sharing. Earlier this week, The Journal reported that high demand for the offering pushed Lyft’s stock pricing to a range of $70-$72 per share, well north of its original targeted range of $62-68.
“The ridesharing industry has become one of the most transformational growth sectors of the US consumer market over the past five years, with Lyft establishing itself as a clear #2 player behind the worldwide leader Uber,” said analysts at Wedbush Securities on Thursday, who initiated coverage of Lyft with a price target of $80 within a year.
Lyft “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 market spent annually in the US,” Wedbush added.
Even before its IPO, Lyft was considered a Silicon Valley “unicorn” — a private company with a valuation north of $1 billion.
The company appears willing to brave a fickle market that’s been battered by uncertainty— and getting a leg up on Uber, which is also scheduled to float its IPO this year.

Not so fast

Along with Levi Strauss’s (LEVI) recent public offering, the two ride sharing services are leading what market observers call a “stampede” of hot closely held companies that are flooding markets with newly liquid shares.
However, some investors are urging investors to heed the bottom line of a lot of these companies, which have yet to turn a profit.
In an interview with Yahoo Finance on Thursday, venture capital pioneer Alan Patricof warned investors to “exercise caution” toward upcoming tech IPOs — including those of ride-sharing giants Lyft and Uber.
Criticizing an atmosphere of “irrational exuberance,” Patricof said onlookers “want to have a piece of what they read about or hear about.”
“They're not focusing as much on the metrics ... what the revenues are and the losses are,” Patricof, the managing director of Greycroft Partners, said.
The competitive landscape is being steadily transformed by the industry’s push toward autonomous driving. With Uber and Google’s autonomous car project, Waymo, ramping up the pressure, Wedbush noted that an “arms race” will create a number of uncertainties for Lyft.


Javier E. David
Editor focused on markets and the economy

Lyft's IPO reportedly prices at $72 per share, leading stampede of tech unicorns

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