New York, March 29: Shares of Lyft opened trading at $87.24 on Nasdaq on Friday, surging 21 percent from its IPO price as investors grabbed stock in the money-losing ride-hailing company.
The company raised about $2.5 billion from its initial public offering at $72 a share.
Lyft was first off the line with its stock offering ahead of an expected IPO later this year from its much-larger rival Uber.
Both companies have driven the smartphone economy to spectacular growth to the detriment of the taxi industry, while also raising questions for automakers about car sales.
“Ridesharing has transformed our lives, making it easier and cheaper to get where we need to go, and it's pioneering an undeniable trend toward transportation as a service,” said Gene Munster and Will Thompson of the investment firm Loup Ventures, in a research note this week.
But Lyft lost $911 million on $2.2 billion in 2018 revenues. Documents show revenues grew sharply from $343 million in 2016, but losses widened as well.
Analyst Richard Windsor, who writes the tech blog Radio Free Mobile, argues that Lyft may not be ready for the scrutiny it will face as a publicly-traded firm.
“Lyft is shooting itself in the foot by going public, as I continue to think that the company is not ready for the harsh glare of the public market and it is giving away a big edge that it could have had over Uber,” Windsor writes.