Lyft shares jump as stock begins trading
Shares of Lyft, which are now publicly available on the Nasdaq under ticker symbol LYFT, surged in initial trading Friday -- far above the $72 per share they had been priced at.
The ride-hailing company’s shares began trading at $87.24 apiece, a more than 20 percent jump over what it had been priced at. Shares ended the day more than 8 percent higher, at about $78 per share.
The initial public offering (IPO) one of the most highly anticipated of the year after pricing shares at $72 late Thursday, the high end of the expected range, which was increased earlier this week amid strong demand for the deal. Its previous range was between $62 to $68 per share.
While Lyft didn’t officially launch until 2012, the company’s co-founders Logan Green and John Zimmer (now CEO) did previously create a carpooling service called Zimride in 2007. Although Zimride wasn’t quite the same concept as it was more of a solution for city-to-city rides and longer trips, it later morphed into an Uber-like concept, officially changing its name to Lyft in 2013.
While Lyft has beaten its main competitor Uber in the race to go public, it is still a fraction of Uber’s market size. 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.
The main reason that Uber is valued so much higher than Lyft is due to its market share and reach. Currently, Lyft operates in more than 300 U.S. cities across the country and 9 cities throughout Canada, while Uber operates in about 785 metropolitan areas worldwide.
Lyft's top investors include General Motors, Ben Horowitz for Andreessen Horowitz, Carl Icahn and Jonathan Christodoro of Icahn Enterprises, Sean Aggarwal, Hiroshi Mikitani for Rakuten and Valerie Jarrett.
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According to The Wall Street Journal, which cites people familiar with the matter, both ride-hailing companies are planning to give some of their most-active or longest-serving drivers a cash reward with an option to buy IPO shares. Lyft is said to be giving out incentives to drivers who have logged the most rides and who have helped build the platform through the years. For example, a Lyft driver who has logged 20,000 rides would be eligible for $10,000 in cash or that equivalent amount of stock, the report said. However, those who have logged below that at around 10,000 would only be eligible for $1,000 cash or stock award. Lyft sources said it only expects a minority of its drivers to be eligible.