Economy

Lyft raises IPO share price range amid strong demand

Lyft raises IPO share price range amid strong demand

Ride sharing giant Lyft will begin trading on Friday after it priced its stock at $72 per share- the high end of market expectations - which gave the company a valuation of over $20 billion in the booming market for vehicle sharing.

Muelle said that Uber would also be watching the IPO with great interest, since its own stock debut is likely to mirror that of Lyft's. Uber, who is also set to go public this year, has reportedly received proposals from Morgan Stanley and Goldman Sachs, which value it around $120 billion.

Uber is expected to go public later this spring.

The institutional investors that bought into the IPO clearly think so, enabling Lyft to demand a price that was above its initial goal of $62 to $68 per share.

At the mid-point of its new target range, $71 per share, Lyft would raise roughly $2.1 billion.

The success of the IPO indicates many investors were willing to overlook uncertainty over Lyft's path to profitability and its strategy for autonomous driving, for fear of missing out on Lyft's strong revenue growth.

More news: Macron praises ties between France, China

Despite struggling to turn a profit over the years, ride-hailing service and Uber competitor Lyft decided recently to take itself public. It's the first of several tech IPOs expected this year.

Orders for the IPO were oversubscribed last week, two days after the company opened its roadshow to investors, people familiar with the process said at the time.

Lyft's revenue was $2.16 billion for 2018, double the previous year's and far higher than $343 million in 2016.

Lyft's market value now stands at $24 billion, which will quickly change Friday after the shares begin to trade. Lyft's overall bookings hit $8.1 billion in 2018, as 1.9 million drivers ferried almost 31 million customers in the US and Canada. Including the overallotment and at the maximum price, the entire offering is now valued up to $2.55 billion. Currently, Lyft is one of the largest and fastest-growing multimodal transportation networks in the United States and Canada.

"Nobody knew they (Lyft) would catch up to this level", said Navin Chaddha, a venture capitalist with Silicon Valley firm Mayfield, which invested in Lyft in 2011. Our net loss was $682.8 million, $688.3 million and $911.3 million in 2016, 2017 and 2018, respectively, and our Contribution was $82.0 million, $400.9 million and $920.8 million in 2016, 2017 and 2018, respectively.