(Reuters) – Lyft Inc. on Wednesday raised the price range for the ipo, as investors looked past the ride-hailing startup of the increasing losses of the company the growth of the market share against larger rival Uber Technologies Inc.
FILE PHOTO: The Lyft logo is seen on the ride-hailing car in Manhattan, New York City, New York, USA, March 4, 2019. REUTERS/Mike Segar/File Photo
Lyft raised its IPO price between $70 and $72 per share, which means that the ride-company is now targeting a rating of 24.3 billion. The increase in the range of $62-$68 rather, it is the result of the investors to worry about missing the biggest AMERICAN IPO since Snap Inc in 2017.
Lyft, the IPO was oversubscribed just two days into its investor roadshow, Reuters reported last week.
At the top of the new range, Lyft would be a market cap of $20.45 billion, a bit larger than Snap Inc when it went public in 2017. At this size, it would be the largest AMERICAN IPO since the Chinese e-commerce Alibaba Group Holding Ltd in 2014.
The count of things such as restricted stock options, Lyft’s valuation as high as $24.3 billion. Lyft was valued at $15 billion in the final private fundraising round in 2018.
In the middle of its new target range, $71 per share, Lyft would raise about $2.1 billion.
The higher price signals a healthy appetite for new stocks after jeans maker Levi Strauss & Co. last week priced its targeted range and shot on the market.
It also indicates that many investors are willing to take a look of uncertainty about Lyft the road to profitability and its strategy for autonomous driving, for fear of missing such a high-profile technology IPO.
The IPO market had a slow start in 2019 by volatile markets at the end of last year and the government shutdown in January block of U.S. regulators of the processing of a new IPO applicants.
All of this bodes well for the likes of Uber Technologies and Pinterest Inc., which also plan to go to the fair in 2019, but if Lyft is still making a profit.
With start-ups such as Lyft to stay for longer, there is a backlog of demand to allocate more money to stocks that are considered to be high-growth in order to diversify away from Wall Street FAANG trade that of Facebook Inc , Amazon.com Inc, Apple Inc, Netflix Inc and Google older Alphabet, Inc .
Yet, Lyft, the strategy and the ability to make money is not without skeptics.
Union pension fund adviser CtW Investment Group has argued Lyft “is an almost insurmountable barrier” to profitability as a result of problems with the ride-hailing company’s pricing strategy and the new regulations drive costs higher.
Lyft a revenue of $2.16 billion for 2018, double the previous year and much higher than $343 million in 2016. It posted a loss of € 911 million in 2018, against $688 million in 2017.
Lyft, the IPO is set to price on Thursday, with shares scheduled to begin trading on the Nasdaq on Friday.
Reporting by Joshua Franklin in New York and Diptendu Lahiri in Bengaluru; Editing by Anil D’silva and Lisa Shumaker