Lyft share price plunges ahead of Uber IPO talks
Shares of ride-share company Lyft have fallen to fresh lows, closing almost 11% lower on Wednesday off the back of news Uber was close to filing its IPO.
Lyft shares fell to new lows on Wednesday after Reuters reports revealed Uber was close to filing its IPO.
Lyft shares reached their lowest closing price since going public on March 29, with their shares closing at $60.12 on Wednesday – 16.5% below Lyft’s final IPO price of $72.
Lyft share price reaches new lows
Lyft shares reached fresh lows, sinking below the low end of the initial price target range of $63 to $68.
It comes after Reuters reports revealed that Uber would seek to sell $10 billion worth of stock in its up-coming IPO, filing with regulators as soon as Thursday. However, Uber had declined to comment on the news.
Reuters sources said on Tuesday, Uber had decided it will seek to sell around $10 billion (£7.7 billion) worth of stock in its initial public offering (IPO) and will make public the registration of the offering on Thursday.
reports also revealed that Uber plans to kick off its investor roadshow during the week of 29 April, according to sources.
Uber’s popularity advantage
Analysts say Lyft’s share price could be a result of investors comparing Uber to Lyft, ahead of Uber’s IPO filing on Thursday. Lyft would be seen as the least popular of the two, and globally known and regularly used throughout pop-culture.
Lyft’s share price could work in Uber’s favour to seek a higher valuation. Uber is now expected to seek a valuation of $90 billion to $100 billion, below the $120 billion advised amount by investment bankers, according to the Reuters news report.
After Wednesday’s close, Lyft announced that it would release financial results for its first fiscal quarter ended March 31 after close of market on May 7.
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