Lyft cruises onto Wall Street in style with strong stock market debut
The ride-hailing company becomes the first tech unicorn to go public in a year expected to be loaded with IPOs.
Gone are the days of Lyft's pink mustache grills.
Lyft has come a long way since its days of fist bumps and pink mustaches.
After its highly anticipated initial public offering, the San Francisco-based ride-hailing company began publicly trading late Friday morning with a preopen share price set at $72. It quickly jumped roughly 20 percent to $85.91 in trading around 9 a.m. PT, before closing at $78.29, up 8.7 percent.
Co-founders Logan Green and John Zimmer rang the opening bell on the Nasdaq exchange, where the company's shares trade under the ticker symbol LYFT. The IPO exceeded expectations on Thursday, raising $2.34 billion and placing Lyft's value at $24 billion. That's significantly higher than its $15 billion estimated valuation as a private company.
Lyft's debut is the first of many expected public offerings this year. If all goes as planned, 2019 will be another year of the tech IPO. Uber , Airbnb, Pinterest, Slack and Palantir are among the other tech companies expected to go public. Analysts think Uber, the world's most highly valued private company, could be worth as much as $120 billion after going public, which would make it the biggest IPO in US history.
Uber and Lyft offer the same core service -- hailing a ride through a smartphone app -- but have very different public profiles. To date, Uber has showcased itself as a global company with a diverse set of projects that include food delivery and flying cars.
By contrast, Lyft is a much smaller company, with services only in the US and Canada. It's concentrated on being a stable transportation-focused company and hasn't experienced the same amount of turmoil as Uber, which generated so many bad headlines that a #DeleteUber movement cropped up two years ago.
Lyft's co-founders incorporated the company in 2007 under the moniker Bounder Web, which was changed to Zimride in 2008. The company officially morphed into Lyft as we know it in 2012, casting itself as a friendly fist-bumping service whose cars wore big furry pink mustaches on the front bumper.
"In those early days, we were told we were crazy to think people would ride in each other's personal vehicles," Green and Zimmer wrote in a S-1 filing earlier this month. "One billion rides later, we're able to look back on an industry that has been defined by the products Lyft pioneered."
Since then, Lyft has launched several initiatives outside of the ride-hailing space, including carpool rides, bikes and scooters for rent, and self-driving cars.
But Lyft hasn't yet become profitable. The company said in its S-1 filing that it garnered $2.2 billion in revenue in 2018 on $8.1 billion in bookings. It also said it saw 103 percent year-over-year growth for revenue and 76 percent for bookings. The company posted a net loss of $911.3 million in 2018, though, up 32 percent from a year earlier.
Lyft acknowledged in its S-1 filing that it has a "history of net losses" and cautioned that "we may not be able to achieve or maintain profitability in the future."
Over the years, Lyft has raised $4.91 billion in private investment funding from firms including Andreessen Horowitz, Founders Fund and China's Didi Chuxing. The fact that it hasn't yet earned a profit might not daunt new investors.
"Like many young companies fueled by venture capital, net income has not kept pace, nor to be honest has it been a point of emphasis," said Clement Thibault, senior analyst at financial research firm Investing.com. "Wall Street is infamous for caring more about growth than profits. As such, Lyft is likely to get a pass on profitability if it can manage to continue its impressive growth streak."
Originally published March 28.
Update: Adds Lyft's confirmation of preopen share price set at $72.
Update March 29: Adds that Lyft has begun trading and its opening price.
Update March 29: Adds closing price.