Lyft stock starts trading
Today, ride-hailing service provider Lyft’s (LYFT) journey as a public company began with its addition to the NASDAQ. While Lyft and its bigger rival, Uber, filed for their IPOs at around the same time in December, Lyft has made it to the exchange first.
In its SEC filing, Lyft disclosed that its revenue rose 209% YoY (year over year) to $1.06 million in 2017, and 103% YoY to $2.16 million in 2018. However, its bottom line is still in negative territory and seeing growing losses, and is unlikely to turn positive in the near term. In 2016, 2017, and 2018, Lyft burned ~$0.68 million, ~$0.69 million, and ~$0.91 million in cash, respectively.
Despite no near-term profitability in sight for Lyft, its IPO received an overwhelming response. According to Reuters, the company’s ten-day IPO roadshow, started on March 18, was oversubscribed after just a couple of days.
Broader market worries
The overwhelming response to Lyft’s IPO could be the result of investors’ high future growth expectations from the ride-hailing industry and their trust in Lyft. However, investors should remember that the company debuted on the NASDAQ as broader markets (SPY) (QQQ) were struggling with US economic slowdown, fears of recession, and US-China trade deal uncertainties. These factors may keep broader markets negative, making Lyft stock’s journey upward difficult.