Specter of Lyft’s Woes Haunts Uber IPO

NEW YORK – Ride-hailing giant Uber is trimming expectations ahead of its debut this week on New York’s Nasdaq Stock Market in light of what happened to rival Lyft, whose shares have fallen 20 percent since the initial public offering (IPO) in late March.

Uber announced early last month that it was gearing up for the largest IPO in recent years.

The company projected a share price of between $44 and $55, which would translate to a market capitalization of roughly $120 billion.

Lyft, the first of the “unicorns” – privately held firms worth more than $1 billion – to go public, saw its stock price rise more than 20 percent at the start of its first day of trading on the Nasdaq.

That initial surge on March 29 raised Lyft’s stock market valuation to $24.7 billion.

The San Francisco-based transportation network company started trading with a price of $87.24 per share, up 21.2 percent from the IPO price of $72 a share that Lyft had set the previous day.

By the end of last Friday’s Nasdaq session, Lyft’s stock price was $62.51 per share, down 20 percent from where it stood at the close of trading on March 29, and 13 percent lower compared with the original offer price of $72 per share.

Lyft, with a current stock market valuation of $17.84 billion, is due to release its first-quarter results after the end of the Nasdaq session on Tuesday. The company posted a $911 million net loss in 2018, up 32 percent from a $688 million net loss the previous year.

Lyft’s revenues last year amounted to $2.16 billion, up 103 percent from 2017.

Market leader Uber had revenues of $11.27 billion in 2018, with net income of $911 million. Even so, the company’s earnings before income, taxes, depreciation and amortization (EBITDA) were $1.85 billion in the red.

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