Lyft Inc. is expected to price its shares above the targeted variety for its initial public offering, in a indication of strong investor demand ahead of the ride-hailing service’s impending launching.
Lyft, which is currently conducting a roadshow to market the shares, has told some investors that it is most likely to price the stock above its formerly targeted variety of in between $62 and $68 a share, according to people familiar with the offer. While it is uncertain what level it will pick when the shares are priced late Thursday, it is not likely to be as high as $80 and is more most likely to be in the low $70s, some of the people stated.
That implies that Lyft would be valued at more than $23 billion on a fully diluted basis, which was the top end of the range. The shares are to begin trading Friday.
Uber and Lyft are both revving up for two of the most prepared for IPOs of 2019. In three rounds, we look at which company will be a much better bet for financiers.
But in a sign of robust financier interest, Lyft has drew in standing-room-only crowds throughout its roadshow that began last Monday.
Investors who went to revealed concerns about the company’s course to profitability, given that Lyft’s $911 million loss last year was the biggest of any other U.S. start-up in the 12 months preceding its IPO, according to S&P Worldwide Market Intelligence.
The company has worked to lighten these concerns by highlighting how it is working to get costs down, some people stated. One way it plans to do so in the near-term is by lowering insurance costs—currently one of the biggest expenses for Lyft—as it gains higher scale, the company’s executives informed financiers in presentations. Lyft executives likewise outlined that longer-term, the adoption of autonomous cars might be a advantage to its bottom line.
Unlike most large personal technology business, Lyft has relatively couple of shared funds, with the exception of Fidelity Investments, among its financier base. Other huge funds are expected to buy shares for the first time in the IPO, pressing up need and, potentially, the price of the stock.
So far, the enjoyment about Lyft is a great sign for the other highly valued technology business looking to follow it into the public markets in what is anticipated to be the greatest year on record by dollars raised.
Pinterest Inc., which made its IPO paperwork public on Friday, is on speed to begin trading in mid-April, and Uber Technologies Inc. is expected to kick off its IPO procedure in the coming weeks.
With low volatility and significant stock indexes trading near record highs after a late-2018 market swoon, Lyft could kick off life as a public company with a near-perfect background. The tech-heavy Nasdaq Composite is up about 16% so far this year.
Lyft and its underwriters don’t strategy to go beyond $81.60 a share. At that price—more than 20% above the high end of the targeted variety—the company would need to file documents with a new range with the Securities and Exchange Commission.
Appeared in the March 27, 2019, print edition as ‘Lyft Raises Its IPO E xpectations.’