Lyft set the price for its initial public offering (IPO) of 32.5 million shares at $72 per share — valuing the company at more than $20 billion. According to CNBC, the company is expected to start trading on the Nasdaq exchange on Friday (March 29) under the ticker “LYFT.”
Earlier this week, it was revealed that Lyft sold all of its planned IPO shares, which led analysts to raise their target price for the ridesharing company.
“We very much think Lyft is the ridesharing company with all the momentum in the U.S. at the moment” based on market share gains, said Tom White of D.A. Davidson. Lyft revealed that its U.S. market share rose to 39 percent in Dec. from 22 percent two years before. “The growth rate at Lyft, and the size of the market, makes that valuation pretty reasonable,” he added.
According to the company's S-1 filing, released earlier this month, Lyft had 39 percent of the U.S. market at the end 2018, up 17 percentage points over two years. In addition, it had losses of $911 million in the 12 months leading up to its IPO, which is higher than any other startup in the U.S. that went public.
The company also saw $2.2 billion in revenue, double the amount it saw in 2017, and $8.1 billion in bookings, an increase of 76 percent from 2017.
The interest and excitement surrounding the Lyft IPO, even with the losses, should bode well for its rival Uber, which is planning to launch its IPO in April. The rideshare giant will reportedly issue its required public disclosure next month, then start its investor roadshow.
There are other startups planning to tap the public markets as well, including Pinterest, which filed its IPO paperwork with the Securities and Exchange Commission (SEC) earlier this month, with an eye toward an April IPO. The company plans to roll out its IPO as a dual-class structure in which existing investors get 20 votes per share. Public investors will get one vote per share. The existing investors who will get more voting power own under 4.76 percent of the outstanding stock. Those investors will also lose majority voting control.