Lyft to debut IPO with $24 billion valuation
The ridesharing company will launch its IPO on Wall Street at $87 a share.
Lyft will debut its initial public offering (IPO) at $87 a share with a $24 billion valuation. The ridesharing app will launch on Wall Street with the symbol, ‘LYFT.’
Details of Lyft’s IPO
Ahead of its launch, Lyft raised its share price after beating Uber to be the first ridesharing company to go public. Lyft’s co-founders, Logan Green, and, John Zimmer, will own 49% of the shares in Class B stock, which holds the most voting power. The corporation’s board members and executives will control 61% of voting rights as shareholders in the dual-class share system. GM and Google also have investments in Lyft as well. Long-time drivers that completed 10,000 rides are also eligible to get Lyft stock.
Will Lyft’s IPO be profitable?
Lyft reported $2.2 billion in revenue in 2018, but also had $911 million in losses. The company may also be overshadowed by rival Uber when it goes public later this year. Wall Street investors are eager to invest in tech startups like Lyft after the delay because of the US government shutdown. However, the eagerly awaited IPO may not live up to its hype. Brian Hamilton, data analyst from Sageworks, said that if the US stock market is strong, investors will overlook Lyft’s steep losses.
‘In a good market, people look beyond things. They don’t see the problems as much,’ said Hamilton.
Other analysts like,Tom White, from D.A. Davisdon are sceptical that Lyft will be profitable because of the incentives the company has to offer to retain drivers.
‘Meaningfully reducing its use of driver/rider incentives may prove difficult in the near-term for Lyft, given that the US is arguably the most competitive large ride-sharing market in the world. Along with the years of losses, the path to profitability is highly unclear,’ said White.
Investors will eagerly await the launch of Lyft’s IPO to see whether ridesharing companies can succeed on Wall Street.
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