Shares of Lyft dipped below its original initial public offering (IPO) price as it enters its second day of trading. The company raised $2.34 billion in its IPO, which TheStreet.com reported was 22 times oversubscribed. When the stock began trading Friday (March 29), shares skyrocketed 23 percent at one point. The stock ended the trading session at $78.29, 8.7 percent higher than where it began. As of Friday (March 29), Lyft had a market valuation of higher than $22.25 billion, noted TheStreet.com.
Recently, Lyft's stock was trading down nearly 11 percent to $69.71. The company priced its shares at $72 each, raising the $2.3 billion by listing 32.5 million shares. While investors applauded the business model and timing of the ride-hailing company, there are concerns about its lack of profitability.
Lyft set a record in terms of the company having the most losses in the year leading up to its IPO. For 2018, the company said in its IPO filing with the Securities and Exchange Commission (SEC) that it earned $2.16 billion, up from $1.06 billion in the prior 12-month period, but had a net loss of $911.3 million, up from the $688.3 million loss it logged in 2017. Lyft has had to spend heavily to compete against Uber and other ride-hailing companies as well as to expand.
Lyft is among the handful of startups that are slated to tap the public markets this year. Rival Uber is expected to go public in April, and could have a valuation of as much as $120 billion. Slack Technologies and Pinterest are also expected to debut on the stock market this year. California is expected to have a tax revenue windfall as a result of the renewed IPO market.