Ride-hailing company and Uber competitor Lyft will go public with 30.8 million shares at between $62 to $68 a pop.
The announcement would value Lyft at $19.46 billion at the upper end of the spectrum. In total, Lyft will aim to raise $2 billion in the IPO.
Per the Securities and Exchange Commission filing, Lyft will issue two classes of common stock, Class A and Class B with adjusted voting powers.
Despite accumulating substantial losses, Lyft has recorded rising revenue and bookings as it takes on rival Uber in the ride-hailing race. With 30.7 million users in 2018, Lyft is one of the most anticipated IPOs of the year, beating Uber to the stock market.
Lyft’s stock market debut will seek to raise $2 billion from new investors. The company has already raised more than $5 billion in private with notable investments from Google’s parent company Alphabet.
Lyft intends to pour the new money into autonomous vehicle development. A bold move for a company that still isn’t profitable. It reported a $911 net loss in 2018.
Still, in its early stages, Lyft continues to discount its prices to attract new customers. As the S1/A filing explains, the company categorizes itself as an emerging growth company. And with good reason. Although Lyft makes zero profits, revenue hit $2.16 billion in 2018, double the previous year.
In what many are calling a tactically brilliant move, Lyft will beat rival Uber to launch its IPO.
Uber is undoubtedly the bigger company. It has better name-recognition and pulled in $11.3 billion revenue last year compared to Lyft’s $2.16 billion.
By launching its IPO first, Lyft secures the headlines by becoming the first ride-hailing service on the stock market. It aims to lure investors before Uber’s launch later this year. As CCN.com previously reported, analysts applauded Lyft’s move to beat Uber:
“I think it’s going to give more visibility to the company. Uber’s got a bigger market share in the United States but Lyft’s market share has been growing and additional publicity for Lyft is going to help it.” – Jay Ritter, University of Florida Cordell Professor of Finance.
Both companies filed their IPO paperwork within hours of each other in December 2018. Uber is expected to launch later this year.
Lyft’s IPO will release 30.8 million shares into the public market, priced between $62 to $68 each. Shares will be divided into Class A and Class B common stock.
Class A shares will receive one vote on Lyft matters while Class B secures 20 votes. According to the S1/A filing, CEO and co-founder Logan Green retains 29.31% voting rights. Co-founder John Zimmer takes 19.45% voting rights.
Should investors jump into Lyft stock when it launches this week? Or hold out for Uber later in the year?
Lyft claims to set itself apart from rival Uber by focusing solely on the ride-hailing market. Meanwhile, Uber has diversified into food delivering and freighting. Lyft has also positioned itself as the more ethical option while Uber battles accusations of exploitation.
Still, Uber’s valuation is expected to reach upwards of $100 billion when it floats on the stock market. That’s a significant premium to Lyft’s $19.5 billion.
Lyft stock will trade on the NASDAQ exchange with the ticker LYFT.
Last modified: July 2, 2020 8:13 PM UTC