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Lyft’s Nasdaq debut sends stock soaring more than 20%

lyfts nasdaq debut sends stock soaring more than 20pct

On Friday, Wall Street investors sent Lyft's brand-new stock soaring more than 20%. The company's price soared to more than $86 moments after it opened at $72 a share. Lyft kicked off its IPO with a bang, and it will not be the only big technology company going for IPO this year.

Lyft is trading on the Nasdaq exchange under the ticker symbol LYFT. The company raised about $2.34 billion and set its market value around $24 billion. Of course, this is subject to change as the company's shares continue to trade on Friday.

Wedbush Securities analysts have issued a “neutral” rating for Lyft's stock and put a price target of $80 on it. “This IPO is a ‘watershed' event for the tech sector as well as the ride-sharing industry that in our opinion has become one of the most transformational growth sectors of the U.S. consumer market over the past five years,” they wrote. They noted that Lyft is now established “as the clear #2 player behind the worldwide leader Uber.”

Lyft “continues to attract drivers and riders with its brand associated with corporate responsibility and social values, an impressive formula to go after the $1.2 trillion market spent annually in the US,” Wedbush added.

Since the company's inception in 2012, the company has racked up more than $3 billion in debt. However, the San Francisco-based company saw its revenue more than double to $2.2 billion last year from 2017, per Lyft's regulatory filing. In 2018, the company's bookings hit $8.1 billion, and 1.9 million drivers have offered 31 million rides to customers in the U.S. and Canada.

So far, Lyft has not turned a profit since co-founder Logan Green and John Zimmer started the company. Lyft's management bankers have spend weeks explaining why the company's IPO makes sense even though it has a history of losses. The company itself has acknowledged that it may be years before it starts to turn a profit, especially if the company's plan to develop self-driving cars doesn't take off.

The company's performance so far as been significant as it continues to move into its next chapter. Lyft's director competitor, Uber, is expected to pursue an IPO of its own this year. The biggest question investors are asking is how the company will handle the markets long-term, and whether it will face the fate that Snap Inc. experience (“Snap” effect).

Hamza Khalid

The Jolt Journal is your source for daily tech news, breaking, reviews, and insights.

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