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Money News

What to Expect from Lyft’s IPO

March 28, 2019

2 min read

Lyft, the rideshare company, is racing toward its initial public offering (IPO).

The company, which along with rival Uber, has upended the taxi and limousine industry, is seeking as much as $2 billion dollars from its upcoming sale of stock to the public, according to its stock prospectus.

Here are some key details:

Target valuation
Revenue in 2018
Lyft riders in 2018

A competitive ride-share market

Lyft’s biggest rival Uber also plans to go public this year, and is likely to surpass Lyft with a valuation of $120 billion, according to reports. As Lyft ventures into scooter and bike sharing, as well as new technology such as self-driving cars, it faces a raft of other competitors such as Apple, BMW, and Google, as well as Baidu, Waymo, and Lime.

Lyft says in its regulatory filing, the ride-share market in the U.S. is potentially as big as $1.2 trillion.

Two types of shares

Lyft will list two types of shares. It will sell class A shares to the general public, and will maintain class B shares for the company founders and other company insiders. The class B shares have 20 times more voting rights than the class A shares.  Increasing numbers of Silicon Valley startups have used this so-called dual-class share structure, which enables owners to maintain control of their companies indefinitely.*

More background

Lyft has nearly 40% of the U.S. ride-share market, according to reports. According to Lyft’s filing, it had 30 million riders and 1.9 million drivers in 2018.

Logan Green and John Zimmer co-founded Lyft in 2007. Following the IPO, the value of their stock is estimated to be worth $570 million and $390 million, respectively.

If you want to find out more about an IPO, read here.  And if you want to learn about a stock prospectus, click here.

*Note: It’s important to remember that all investing involves risk, and that it’s possible for stocks, bonds, and other securities to lose their value due to changing market conditions. Additionally, following an IPO, the market price for the newly issued security, or stock, may be subject to significant fluctuations in response to factors such as lack of liquidity, as well as market and price volatility. Oftentimes, fluctuations are due to the expiration of a lock-up period where company insiders such as employees sign an agreement that prohibits them from selling shares for a specified period of time (in the case of LYFT this is 180 days). When lock-up periods expire, all insiders tend to sell their stock in order to realize profit, depressing the stock price in the process.

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By Jeremy Quittner
Jeremy Quittner is the senior writer for Stash.

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