Lyft Sell-Off Hits 11% as Uber Nears 2019's Biggest IPO Filing
Uber is aiming for a public valuation of as much as $100 billion. Lyft’s market capitalization ended the day at $17.2 billion.
(Bloomberg) -- Lyft Inc. shares took yet another nosedive on Wednesday amid reports that larger rival Uber Technologies Inc. could be filing for an initial public offering as soon as Thursday. The shares ended the day at a record low, falling 11 percent in New York.
Uber’s offering is expected to be the largest U.S. IPO this year and among the 10 largest of all time, and a person familiar with the matter said the company is seeking to raise about $10 billion. That compares with the $2.3 billion raised when Lyft went public late last month. According to the Wall Street Journal, Uber is aiming for a public valuation of as much as $100 billion. Lyft’s market capitalization ended the day at $17.2 billion.
Lyft had opened its trading in March amid lots of hype, largely due to being the only publicly listed ride-sharing company. However, the shares have dropped over 16 percent since then, and now with Uber joining the fray, demand for Lyft stock may take a hit.
“Given the substantial market opportunity and investor interest in the secular ride-sharing opportunity, Lyft will likely benefit from being the only direct publicly traded play on the ride-sharing market,” Susquehanna analyst Shyam Patil said ahead of Lyft’s trading debut. “However, once Uber goes public (expected in the mid-April timeframe), we could see outflows as investors seek to invest in Uber.”
Read more: Uber’s Revenue, Losses Outpace Lyft, Pre-IPO-Filing Data Show
Uber’s IPO is just the latest trouble for Lyft, which has endured an unenviable first few days as a public company having attracted skepticism about its market share growth, revenue expansion and optimistic valuation. Short interest in the stock currently stands at nearly 43 percent of free float, according to financial analytics firm S3 Partners, and last week IHS Markit said it was the most expensive bearish bet in the U.S. equity market.
“The shadow of the Uber S-1 and the upcoming IPO roadshow is a clear overhang on Lyft shares as the Street is anticipating this event,” Wedbush analyst Daniel Ives said in an email interview. “Lyft is viewed as the little brother of Uber and the Street is worried that the S-1 will reveal metrics that put Lyft in a negative light.”
--With assistance from Drew Singer.
To contact the reporter on this story: Esha Dey in New York at edey@bloomberg.net
To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Will Daley
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