Lyft-ing Off as a Public Company .

The ride-hailing company rings the Nasdaq Opening Bell in Los Angeles on its IPO day.

Lyft-ing Off as a Public Company

Lyft IPO

Ride-hailing company Lyft Inc. (LYFT) launched its initial public offering on Friday, March 29, and by going public, the company plans to reinvest in the communities it serves.

Lyft, founded in the summer of 2012, is an on-demand transportation-as-a-service company that matches drivers with passengers who request rides through its smartphone application. The company also has a network of shared bikes and scooters in various cities, including Los Angeles, Nashville, San Antonio, Chicago and New York.

Through its IPO, Lyft will raise funds and expand its offerings to cities around the U.S. and Canada. On Friday, the company announced that it will be investing $50 million a year, or 1% of profits, in Los Angeles through Lyft City Works, which supports "locally-driven transportation and other initiatives to improve people's lives in every city where we operate." 

"Our mission is to improve people's lives with the world's best transportation, and today we are taking Lyft public," said Co-founder and Co-CEO John Zimmer. "In doing so, we want to demonstrate that success is delivered by combining positive benefits to local communities with financial business results, and our long-term value to both shareholders and society will be far greater. 

Lyft’s IPO on the Nasdaq Global Select Market was highly anticipated and may be the beginning of a record year for tech IPOs, according to the Wall Street Journal. The IPO market had stalled at the beginning of the year due to the government shutdown, but momentum shifted around the beginning of March. Investors appear intrigued by what is coming to market, with several prominent start-ups and technology companies in the IPO pipeline. Lyft’s IPO was reportedly “oversubscribed” by the second day of its roadshow to investors.  

Lyft priced its IPO at $72 on Thursday night, putting its value at more than $24 billion. Earlier in the week, it had revised its deal price range to $70 to $72 a share, up from an initial targeted range of $62 to $68 a share, as investor demand surged. It listed under a dual-class structure, offering 30.77 million shares of Class A Common Stock.                              

"This is a major milestone," said Nelson Griggs, the president of the Nasdaq Stock Exchange. "Lyft launched in 2012, and has embarked on a mission to improve lives with the best transportation, and ride-by-ride, you are helping to reimagine how our cities can be built around people, not cars. By envisioning a world where cities feel like communities again, where transportation and technology bring people together, instead of pull them a part, Lyft believes in a future where public companies, civic leaders and grassroots organizations work together to for the greater good of our cities."  

For investors, Lyft represents the first opportunity to get exposure to the rapidly growing ridesharing industry.

“The ridesharing industry has become one of the most transformational growth sectors of the U.S. consumer market over the past five years with Lyft establishing itself as a clear [number two] player,” Wedbush analyst Dan Ives wrote in a research note. “The brand loyalty of Lyft has been quite impressive as the company continues to attract drivers and riders with its brand associated with corporate responsibility and social values [;] an impressive formula to go after the $1.2 trillion [U.S. transportation] market.”

Through its technology platform, Lyft has facilitated more than one billion rides and is available to 95% of the U.S. population with all of its services, according to its IPO prospectus.

“We see the company holding significant momentum in terms of share gains and [it] appears poised to post eye-popping growth rates in riders and rides in quarters ahead,” Northcoast Research Analyst John Healy said.  

TAGS: Lyft IPO Listings
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