Advertisement

Lyft raises $2.34 billion as U.S. IPOs kick into high gear

Lyft raises $2.34 billion as U.S. IPOs kick into high gear
Lyft's IPO gives it a market value of about $20.6 billion. That value rises to about $25 billion with restricted stock and greenshoe shares that underwriters could issue. (Timothy A. Clary / AFP/Getty Images)

Lyft Inc. raised about $2.34 billion in its initial public offering, pricing its shares at the top of an elevated range in a listing seen as a bellwether for Silicon Valley companies.

The No. 2 U.S. ride-hailing company said it priced 32.5 million shares Thursday at $72 each. That was at the top of the marketed range, which was increased to $70 to $72 on Wednesday. Lyft also increased the size of the offering from the 30.8 million shares it had planned to sell.

Advertisement

At that price, the IPO gives Lyft a market value of about $20.6 billion, based on the shares that were to be outstanding after the IPO, according to earlier filings. That value rises to about $25 billion with restricted stock and “greenshoe” shares that could be issued by underwriters.

The San Francisco company beat its larger ride-hailing competitor Uber Technologies Inc. to the market. Uber is expected to publicly file for its offering in April, kicking off a listing that could value it at as much as $120 billion, people familiar with its plans have said.

Lyft’s offering is the biggest in the U.S. by a tech start-up since Snap Inc. went public two years ago and is also the largest so far this year, signaling that IPOs are rebounding from the partial federal government shutdown that dampened first-quarter listings. Last week, Levi Strauss & Co. returned to the public markets, pricing shares $1 above its marketed price range to raise $623 million. Other tech companies considering going public on U.S. exchanges this year include Pinterest Inc., Postmates Inc. and Slack Technologies Inc.

“We really think this is going to be the best year we’ve seen for IPOs in ages,” said Jackie Kelley, Americas IPO leader at Ernst & Young. “The tech IPOs are really going to get the market moving.”

Lyft first offered its shares for $62 to $68 each. Orders for the IPO were oversubscribed last week, two days after Lyft opened its roadshow to investors, people familiar with the process said at the time. On Wednesday, Lyft filed to increase that range.

The company’s appeal to investors was based on the potential for the ride-hailing industry’s expansion as well as its own growing revenue, which doubled to $2.2 billion in 2018 from the previous year, according to its IPO filing. During that time, its losses also grew, from $688 million in 2017 to $911 million last year. Lyft told potential investors that it expects its expenses to decline next year, according to people who were present for one of its pitches.

Through Class B shares that carry 20 votes for each ordinary share, co-founders Logan Green, who is chief executive, and Vice Chairman John Zimmer will have about 49% of the voting rights, according to the filing.

The stock is set to start trading Friday on the Nasdaq Global Select Market under the ticker LYFT.

JPMorgan Chase & Co. led the public offering with Credit Suisse Group and Jefferies Financial Group Inc. Altogether, more than two dozen banks were listed in the company’s filing as participating in the offering. JPMorgan will serve as the stabilization agent, giving it a chance to earn additional fees by ensuring the first day of trading goes smoothly.

Advertisement
Advertisement