US: Lyft to price shares higher than planned

Lyft, the ride-hailing startup that is gearing up for an initial public offering later this week, will reportedly price shares higher than the initial range due to strong demand on the part of investors.

According to a report in The Wall Street Journal citing people familiar with the deal, Lyft told some investors during its road show that it is likely pricing shares in its IPO higher than the range of US$62 to US$68 a share. The paper noted it’s unclear how much higher shares will be priced late Thursday (March 28). The Wall Street Journal did say it’s not likely to be as high as US$80 a share, but more likely in the low US$70s a share. Shares of Lyft will begin trading as a public company Friday, March 29.  If it does price its shares higher, the ride-hailing startup could have a valuation of more than US$23 billion, which is at the high end of the previous target.  If Lyft was to price it above US$81.60 a share, it would have to file paperwork with the new range with the SEC.

Lyft and rival Uber are both going public this year, garnering a lot of attention from investors. Lyft has been drawing standing room only crowds to its road show, noted the WSJ. While there is a lot of interest in Lyft, there are also concerns about its lack of profitability. It will hold the record as having the most losses of a startup going public in the twelve months leading up to the IPO, reported the paper, citing S&P Global Market Intelligence. Lyft had losses of US$911 million in 2018.

The interest and excitement surrounding the Lyft IPO, even with the losses, should bode well for other startups gearing up to tap the public markets. Pinterest filed its IPO paperwork with the Securities Exchange Commission late last week with an eye toward an IPO in April, while Uber is expected to start its IPO process in the next few weeks.