The stock of ridesharing company Lift (NASDAQ: LYFT) increased on its first trading day. The company made its public debut on the Nasdaq stock market, and shares quickly jumped over 20% from the offer price. But the shares closed the trading day up 8.7% at $ 78.29
The excitement has been built in advance by Lyft's debut. The company filed for its first public offering (IPO) earlier this month and beat rival Uber to the public markets, as the much larger competitor is expected to debut once in April.
For now, at least, the public scene
Strong demand for the shares
The company originally intended to price its holdings in the range of $ 62 to $ 68 per share, which would have increased by about $ 2 billion, thus valuing the company of $ 21 billion and $ 23 billion. . Yesterday, Lyft launched a revised S-1, which increased the price to a range of $ 70 to $ 72 per share.
Later on Thursday, the company praised its offering in the top of the range, which would increase about $ 2.5 billion and value Heft of more than $ 24 billion. Apparently, the higher share price was not enough to curb the investor need for the newly developed share. It also makes Lyft one of the most valuable US companies to become public in the last 10 years. But Uber, with a valuation expected to be as high as $ 120 billion, may soon surpass Lift. The company is expected to be an IPO in the coming weeks.
Show me the money
In the accounting records, the Lift reported revenue of $ 2.2 billion in 2018, up over 107% the following year. This drove (pun intended) total orders – the total amount of riders paid – to more than $ 8.1 billion. The company also revealed losses of $ 911 million last year, an increase of more than 32% compared to the $ 688 million lost by Lyft in 2017.
Operational calculations provided further insight into how Lift can grow from here. The company accumulated 30 million rides last year from nearly 2 million independent drivers. Active riders – which Lyft defines as everyone who has taken at least one trip in the quarter – grew to NOK 18.6 million in the quarter 2018, an increase of 48% year-on-year. Earnings per active rider – calculated by dividing the total revenue by the number of active riders – increased to $ 36.04, an increase of 32% over last year. The total number of rides last quarter also grew, climbing to 178.4 million.
Some Unexpected Winners
Some of Lyft's drivers are probably celebrating today. The company announced in its IPO filing that it would allow a number of the most dedicated drivers to participate in its IPO so that they could buy shares at the final IPO price. This benefit was limited to drivers who had accumulated at least 10,000 rides by February 25.
This opportunity to buy stocks would be meaningless without money to pay for them, so Lyft also planned to reward their top drivers with one-time bonuses up to $ 10,000. They would then have the opportunity to keep cash or invest in the company. Rides with more than 20,000 rides were eligible for $ 10,000 cash, and those with 10,000 rides would receive $ 1000, and it would also be drivers who have earned from Lyft's Driver Advisory Council.
As part of their IPO today, Lyft announced that it committed at least $ 50 million a year, or 1% of the profits (what's bigger), to three measures to improve urban life: transportation for those who need , developing a transport infrastructure in sub-areas, and creating a clean energy future. 19659010] Investor takeaway
There is much discussion about whether it is wise for investors to buy shares on Lyft's first trading day. Even Legendary Investor and Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) CEO Warren Buffett weighed in on the discussion and urged investors to exercise caution and say in An interview, "I think buying new offers in hot periods in the market … I don't think that's something the average person should think of at all."
Although there is absolute excitement around Lyft's IPO, the ultimate test will be the company's financial performance in the months and years to come. With nearly $ 1 billion in losses last year and due to the struggles with Uber for market share, it may be a long time before the company is profitable. The best investors can hope from Lyft at this point is steady economic improvement.
Buffett can be on something.