Lyft stock goes into reverse after big IPO

Lyft IPO lifted by service’s popularity

Lyft hit a nasty pothole in its first full day as a public company. Shares in the ride-hailing service, which on Friday staged one of the biggest technology initial public offerings in recent years, slid nearly 12 percent. The stock closed at $69.01, below the offering price of $72 a share.

The decline took roughly $3 billion off Lyft’s market capitalization. The company has lost more than $2 billion since 2016 and racked up $3 billion in debt; it has yet to turn a profit.

Lyft president on self-driving cars, what sets them apart from Uber

Investor demand for the initial stock offering was strong, with boosters pointing to Lyft’s accelerating growth — its revenue doubled last year to $2.2 billion and its ridership surged.

Yet while Wall Street is bullish about the long-term prospects for Lyft and for Uber, the largest ride-hailing company, analysts said generating profits in the short term will be tough. Other challenges include a murky regulatory environment and the industry impact of self-driving cars.

Lyft’s performance on the public market will be closely watched by other growing tech companies that were expected to list their shares this year, including Uber, social media company Pinterest and messaging software maker Slack Technologies.

On 18 IPOs priced in the first three months of 2019, down 50 percent from a year ago and the slowest deal pace in three years, according to Renaissance Capital.

Categories: US & World News

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