UK Investors Can Buy Lyft Shares Today After IPO Price Range Smashed
Lyft hit the very top of its IPO price range of $70-$72 yesterday, having already raised it from $62-$68 earlier in the week after strong investor interest in the ride hailing app company. The Uber competitor’s final IPO share price of $72 values the company at a total market capitalisation of $24 billion, making it the largest technology IPO since 2017. A total of $2.34 billion has been raised from the float, which saw Lyft sell 32.5 million shares. Total equity sold was also increased from the 30.8 million shares originally planned.
Lyft has been proven right in taking the decision to make sure their IPO came ahead of that of larger rival Uber, whose IPO planned for next month is expected to see it valued at over $100 billion. The core current business of both companies is ride-hailing apps that tap into the ‘gig economy’ by allowing any car owner to moonlight as a taxi driver, or even do so full-time. It’s unusual to see two such similar businesses attempt to drum up interest in an IPO in such a concentrated period of time. But with the smaller Lyft’s IPO having proven such a success, it now looks as though there is a good chance it will come off for both companies.
Lyft’s IPO could potentially raise even more money. The total could swell to $2.69 billion if the IPO’s underwriters take up their option to buy another 4.9 million shares. Lyft’s IPO will have been carefully watched by a phalanx of tech companies likely to include Pinterest, Airbnb and Slack. Last year’s sharp tech sell-off, which saw valuation in the sector slump by over 20% between October and the end of the year, had called into question whether planned IPOs would go ahead this year. But the sector’s strong recovery since and now a big, successful IPO is likely to convince several to strike while the iron is hot.
Lyft’s IPO success comes despite concerns being raised around the rights that the shares sold offered investors. Co-founders Logan Green and John Zimmer are left with less than 5% of the company’s total equity between them, valuing their shares at a respective $603 million and $416 million. Despite that, the pair still hold over 50% of the total voting rights. The dual-class shares mean the co-founders’ shares each come with 20 votes to 1 for those sold through the IPO.
The IPO shares will float freely on the Nasdaq from today, meaning Brits investing online will now be able to buy them if they think their value will continue to rise as a public company.
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