All Eyes on Lyft Ahead of IPO

The highly anticipated initial public offering for Lyft has excited investors, especially after the ride hailing company increased its share price range earlier this week.

In an amendment filing, Lyft announced its price per share would be between $70 and $72, an increase from the initial $62 to $68 range.

“In the land of IPO’s and a bull market, they are not incredibly high priced. I think that are pretty fairly priced,” Brian Hamilton, founder of the financial tech company Sageworks, told Cheddar on Thursday.

Under the ticker LYFT, the company will go public Friday morning on the Nasdaq Stock Market.

Founded in 2012, Lyft was originally known for the fuzzy pink mustaches fixed to the hoods and grilles of its cars and largely seen as the younger brother of Uber.

Seven years later, the company has completed over one billion rides and serves more than 30 million riders annually. The number of Lyft drivers rose to 1.9 million in 2018.

Lyft reported $2.2 billion in revenue last year and over $8 billion in booking transactions. The company, however, reported a net loss of $911.3 million in 2018 ー the “highest losses of any IPO in American history,” according to Hamilton.

Lyft is “focused on continuing to build our platform with the characteristics that are critical to winning and maintaining strong user relationships at scale, including size, marketplace density, brand affinity, trust, affordability, reliability and expertise in building and scaling networks,” the company said in its filing to the federal Securities and Exchange Commission.

In 2017, consumer expenditures on transportation were approximately $1.2 trillion, according to Lyft.

“We believe that Lyft currently addresses a substantial majority of this massive market, and we intend to further extend our offerings to capture more of this opportunity in the future,” the filing added.

While it has plans to expand internationally, Lyft currently operates only in the U.S. and Canada. By contrast, Uber operates in over 60 countries.

“In the near term, [the IPO] is a domestic play,” Dan Ives, managing director of equity research at Wedbush Securities, told Cheddar. “But it’s about profitability. It will be incrementally tough for them to go after those international markets.”

Hamilton predicted that the IPO will be high but within reason.

“It’s not super crazy land as we saw with other offering like Snapchat and Twitter,” he said, adding that the market will ultimately drive long term value for the company.

“Every company that goes public, every single one, says they are the unique story,” Hamilton said. “The truth is you always have to look at the fundamentals: sales, profitability, valuation.”