Lyft shares opened for trading today at $87.24, above the public offering price. The top-of-the-range hailing company is now valued at$24.3 billion after raising more than it had initially planned to do with investors overlooking uncertainty over its journey to becoming a profitable company.
On the other end, Lyft's primary competitor Uber is set to go public this April too.
Despite its bigger size, Uber has evolved in lock-step with Lyft, adding new types of rides like car-pooling, changing fares investing in autonomous vehicle development and adding scooters and bikes. Both companies have been losing money, subsidizing rides to boost market share.
The co-founder and chief executive officer of Lyft owns 684,591 class A shares and 7,689,182 class B shares and holds a 2.9 percent stake in the company.
"It's good news for them to see that the market has a huge appetite for IPOs", said Reena Aggarwal, director of the Center for Financial Markets and Policy at Georgetown University.
Lyft has, for years, been seen in the shadow of its larger.
While Uber did damage control, Lyft raised more money, expanded to dozens more cities and gained market share against its rival.
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LOS ANGELES/NEW YORK - Lyft Inc's shares opened up more than 20 percent in their market debut on Friday, giving the ride hailing startup a market value of more than $27 billion, amid strong investor demand that bodes well for larger rival Uber Technologies Inc. The shutdown of the federal government shuttered U.S. agencies that review IPO plans, and this must have delayed the rush of 2019 activities but the Lyft case has shown there is heightened enthusiasm for more offerings that are likely to come.
But luckily for Lyft, Uber has been plagued with controversy over the last few years. "Lyft launched in 2012, and has embarked on a mission to improve lives with the best transportation, and ride-by-ride, you are helping to reimagine how our cities can be built around people, not cars". On the flip side, if Lyft is responsible for a percentage point or two of the vehicle miles in the United States, there's a lot of growth potential if the company can tap that other 99 per cent and give people reasons to give up their personal cars. If.
But now that Lyft has hit the public market, questions remain whether the tech-transport pioneer can leverage the momentum into profitability, and what the IPO means for the future of the "sharing" economy and mobility start-ups eager to trod the same path. It paves the way for other Silicon Valley companies seeking to float in the stock market this year, including Pinterest Inc, Slack Technologies Inc and Postmates Inc.
Lyft was able to appeal to stock buyers excited to own a piece of a fast-growing company grabbing at the giant pool of consumer spending on transport. "Right now they both have the chance to become that, and the next decade as publicly-traded companies will help determine who does".
Bussewitz reported from NY.