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Don't Take Any Lyft Stock Tips From These Underwriters Just Yet

Don't Take Any Lyft Stock Tips From These Underwriters Just Yet

(Bloomberg) -- While the leaders of Lyft Inc. made the rounds on broadcast media this morning, the Wall Street firms that helped them -- and possibly their competitor, Uber -- go public were largely quiet.

It’s to be expected that analysts from banks like Jefferies LLC, JPMorgan Chase & Co. and Credit Suisse Group AG that served as underwriters to the now Nasdaq-listed unicorn didn’t dive in and pound the table for investors to participate in the company’s first day of trading. Notably, the same can be said about sell-side analysts at firms such as Morgan Stanley and Goldman Sachs Group Inc. that are said to be leading Uber Technologies Inc. to its own IPO.

Whether analysts from the banks expected to help launch Lyft’s rival are waiting for the first trades, or simply are hesitant to tip their hand on the ride-sharing industry and valuations, remains to be seen. However, Lyft’s debut is sure to attract attention from Wall Street to Main Street, including executives at Uber and the bankers that are helping other tech unicorns, like home-rental site Airbnb Inc., to the public markets.

Coming into today, Lyft has split analysts from firms not expected to be involved as underwriters for the two ride-share firms. The San Francisco-based company had two buy-equivalent ratings and two holds with an average price target of $81, a level shares already exceeded as trading began Friday.

Those who were less bullish on the first of its kind publicly traded company pumped the brakes on driver retention, price competition and insurance costs. Wedbush analyst Daniel Ives, who launched coverage at neutral, recently wrote that it’s “hard to be bullish” at prices above $80 per share -- in-line with his 12-month price target. Shares opened at $87.24 before falling to $80.72 at 1:40 p.m. in New York.

Ives’s cautious sentiment was echoed by Berkshire Hathaway Inc.’s Warren Buffett in a CNBC interview on Thursday where he suggested the typical investor should be cognizant of the market’s boom and coinciding burst of tech unicorns.

“Buying new offerings during hot periods in the market -- I don’t think it’s anything the average person should think about at all,” he said. “I’ve never been a big buyer of” initial public offerings, Buffett continued, joking that the last time he did was likely for Ford Motor Co.

To contact the reporter on this story: Bailey Lipschultz in New York at blipschultz@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Brad Olesen, Jeremy R. Cooke

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