(Bloomberg) -- Lyft Inc.’s market capitalization fell below its last private valuation Thursday in premarket trading when shares dipped to $52.48.
While some other high-profile technology companies like Facebook Inc. struggled in early days of trading only to rebound later, Lyft’s plight is a troubling sign in the early days of what’s set to be a banner year for public listings that will include Uber Technologies Inc., Pinterest Inc., Zoom Communications Inc., Slack Technologies Inc. and others. It’s a signal that the public markets aren’t totally buying into some of the hype surrounding this generation of money-losing startups.
Lyft raised $600 million in a funding round led by Fidelity Investments last summer, valuing the company at $15.1 billion. A 27% decline in shares since Lyft’s IPO has brought its valuation down to $14.3 billion in premarket trading.
The second-place ride-hailing company’s public offering got off to a troubled start. Lyft shares traded 21% above the $72 IPO price when they opened March 29. They began falling from there. On the second day of trading, shares sank below that IPO price and they have continued falling as analysts question Lyft’s growth potential and prospects for profitability compared with larger rival Uber.
On April 11, Uber publicly filed its IPO prospectus, putting further pressure on Lyft as investors compare the two companies’ financials. Uber is pricing its shares after the market closes Thursday and will begin trading Friday.
©2019 Bloomberg L.P.
RECOMMENDED FOR YOU
POPULAR