Lyft increase IPO price target after gaining ground on Uber
The ride-hailing start-up has upped its price range for its upcoming initial public offering after investor appetite grows as the company grows its market share against larger rival Uber.
Lyft has increased its price target for its initial public offering (IPO), after investors have shown a willingness to downplay its losses in favour of the company’s growing market share against is larger rival Uber.
The ride-sharing company raised its IPO price range from $62 - $38 to between $70 and $72 a share, representing a valuation of $24.3 billion. Lyft opted to increase its target price for its IPO as investor demand has grown significantly for what is shaping up to be the largest listing since Snap in 2017.
Investors have healthy IPO appetite
The new of Lyft increasing its IPO price range is a good sign for other new listings, with Levi Strauss & Company going public last week, hitting its targeted range, spurring rivals Lee and Wrangler to follow suit.
Lyft’s confidence in upping its target price range also shows that investors are happy to look past a company’s flaws, with the ride-sharing start-up struggling to reach profitability, incurring heavy losses in its pursuit for driverless driving.
IPO market suffers slow start to 2019
The IPO market has struggled to find its footing in 2019, mainly due to increased volatility at the tail end of last year and the long-running government shutdown in the US which stopped regulators from processing new IPO applicants.
These headwinds have left investors hungry for new IPOs and Lyft has already benefitted from the backlog with its listing heavily oversubscribed.
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