It's Time For Uber And Lyft's White Collar Workers To Step Up

It's Time For Uber And Lyft's White Collar Workers To Step Up

Lyft had little trouble getting investors to hop on board its increasingly popular ride-hailing service, as its initial public offering fetched a $72 U.S. per-share price that exceeded even its own expectations.

Muelle said that Uber would also be watching the IPO with great interest, since its own stock debut is likely to mirror that of Lyft's.

The IPO is seen as a litmus test for a number of technology flotations that are expected this year, including Lyft's bigger rival Uber which could be valued at as much as $120bn when it lists its shares. It paves the way for other Silicon Valley companies seeking to float in the stock market this year, including Pinterest, Slack Technologies and Postmates. Lyft also said it ended up selling 32.5 million shares in the offering, above the almost 31 million that it had targeted in its regulatory filings leading up to Thursday evening's pricing. On March 27, the company increased the indicative price range for its IPO to $70-$72 a share, from $62-$68 previously, implying a fully diluted market capitalization of more than $24 billion. Still, Lyft has been able to pick up more riders in the last couple of years, thanks in part to big public stumbles by Uber, which prompted some users to look for alternatives.

It is expected to be one of the largest IPOs ever for an American startup in the tech sector, only exceeded by that of Facebook in 2012.

Lyft is scheduled to set its official IPO price range on Thursday, with trading on the Nasdaq stock exchange to begin on Friday.

"There's a lot of capital waiting to get invested, and that certainly helps Lyft to raise the target price", said Holger Mueller, principal analyst and vice president of Constellation Research Inc.

Lyft has been gaining ground on Uber in the past two years, which enabled it to double its revenue last year to $2.2 billion - the kind of growth that tends to wow investors. Including the overallotment and at the maximum price, the entire offering is now valued up to $2.55 billion. Indeed, Lyft has acknowledged it may be many more years before it starts making money, especially if its efforts to lower costs by developing a fleet of self-driving cars don't pan out. The company pulled in revenue of $2.16 billion in 2018 but it still posted an overall loss of $911 million.

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