Lyft Prices I.P.O. at $72 a Share

Lyft was not the first ride-hailing company. The company priced its shares at $72 each on Thursday, after raising its price range amid significant demand from prospective shareholders. In total, the company raised about $2.3 billion, having also increased the number of shares that were sold. (That amount could grow if Lyft’s underwriters sell an additional block of shares to meet even stronger-than-expected investor demand.)
The offering marks the arrival of a new generation of Silicon Valley darlings on the public markets. Many of the companies promised new business models, upended established industries such as transportation and triggered a chain effect on how people work and make a living. Who’ll Get Rich When Lyft, Uber and Other ‘Unicorns’ Go Public
Some of the most valuable tech start-ups are preparing to go public, starting with Lyft on Friday, and the I.P.O.s promise to generate big paydays for the start-ups’ employees and investors. But some investors worry that these companies, awash in red ink and unlikely to turn a profit for years, are being valued too highly and could ultimately disappoint their new public-market backers. Some companies that went public while running big losses, including Groupon and Snap, now trade well below their I.P.O. prices. In its offering prospectus, Lyft revealed that it lost close to $1 billion in 2018. The companies also burn cash on other transportation initiatives, like bikes, scooters and autonomous vehicles. Last year, Lyft bought the largest bike-sharing company in the United States for around $250 million. “With Lyft, obviously, the market is saying, ‘We’re willing to give you the benefit of the doubt on a lot of things,’ given that there are huge uncertainties about its future,” Mr. At its I.P.O. Image
At its I.P.O. price, Lyft’s valuation puts it within range of old-line auto companies like Ford Motor.CreditDamien Maloney for The New York Times

Over the past week and a half, Lyft executives and their bankers embarked on a roadshow that took them from New York to Kansas City to San Francisco, pitching their business to institutional investors. Lyft initially set a price range of $62 to $68 for its shares, before raising that range on Wednesday to $70 to $72. Between 2001 and 2018, I.P.O.s that were priced above their initial range averaged a return of 37 percent, Mr. Ritter said. Among them: the company’s founders, Logan Green and John Zimmer, who are poised to be worth hundreds of millions of dollars; Rakuten, the Japanese e-commerce giant; and venture capital firms like Andreessen Horowitz. Zimmer are taking their company public, they will still retain control, following in a long tradition of founder-led technology businesses. Drivers with 10,000 rides will receive $1,000, which at the $72 price would allow them to buy 13 shares before taxes. Drivers who have finished 20,000 rides will receive $10,000. Only full-time drivers who have been with the platform for several years are likely to make the cut, said Harry Campbell, an Uber and Lyft driver who runs the driver blog and resource site The Rideshare Guy. “If you gave 10,000 rides for Lyft, you actually were a big part of helping build this company.” He added that the I.P.O. Unlike Lyft’s employees and early investors, who are restricted by a lockup period from selling their shares, drivers will be able to sell any Lyft stock purchased through the cash bonus program as soon as the company begins trading on the public market, according to an email sent to qualifying drivers and reviewed by The New York Times. But the cash bonuses ultimately did not satisfy many drivers, who work as freelancers for Lyft and Uber and do not receive full-time employee benefits. This week, hundreds of them protested in San Francisco and Los Angeles against lower pay rates. Campbell said.