Lyft IPO Enthusiasm Drives Up Founder Stakes to $1.4 Billion

Gone are the days of Lyft's pink mustache grills.                  Lyft

The San Francisco company's stock is set to begin trading Friday on the Nasdaq stock exchange under the ticker symbol "LYFT".

The offering fulfilled a key strategic goal for Lyft: beating larger rival Uber to the market. 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.

Given that the company is going public with 31 million shares to sell off, that could have put Lyft's market capitalization at around $24 billion - a tidy sum for a company that still finds itself buried in debt.

Even before its IPO, Lyft was considered a Silicon Valley "unicorn" - a private company with a valuation north of $1 billion. Lyft also said it ended up selling 32.5 million shares in the offering, above the almost 31 million that it had targeted in its regulatory filings leading up to Thursday evening's pricing.

The price is at the high end of a revision Lyft made after high investor demand prompted the company to increase its initial goal of fetching $62 to $68 for each of the almost 31 million shares sold in the IPO.

It also indicates many investors are willing to overlook uncertainty over Lyft's path to profitability and its strategy for autonomous driving, for fear of missing out on such a high-profile technology IPO.

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Uber and Lyft offer the same core service - hailing a ride through a smartphone app - but have very different public profiles. First, Buffett himself doesn't like to invest in IPOs.

The IPO gives Lyft a value of about US$25 billion, including restricted stock and greenshoe shares that could be issued later by underwriters. Reuters reported the IPO was oversubscribed after just two days.

Lyft lost $911 million on $2.2 billion in 2018 revenues.

High demand for the offering pushed up the range of Lyft's stock pricing, well north of its original targeted range of $62-68.

Lyft and Uber drivers have tried - and failed - on multiple occasions to be reclassified as full-time employees instead of freelance workers. Uber is in more than 70 countries, although it has steadily consolidated certain overseas markets, while Lyft has stuck to the United States and Canada only.

Through Class B shares that carry 20 votes for each ordinary share, co-founders Logan Green, who is chief executive officer, and vice chairman John Zimmer will have about 49% of the voting rights, according to the filing.

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