Lyft’s share prices fell 12% on April 1
Lyft (LYFT) rose nearly 9% during its debut on March 29. However, the stock fell ~12% to $69.01 on April 1, which is below its IPO price of $72.
After over 71 million shares were traded on Lyft’s first day, nearly 42 million shares changed hands on April 1. New stocks usually have a high trading volume and are quite volatile.
For example, Spotify (SPOT), which went public a year ago, fell 9% on its second day of trading. Currently, Spotify is trading 6% below its IPO price.
Uber will likely to go public as well next month. Lyft falling 12% isn’t good news for Uber. The company might not have as much bargaining power with investors if Lyft’s stock prices continue to fall.
Why Lyft’s stock prices might be falling
Lyft stock was trading 4.5% below the close on April 1 during pre-market trading on April 2—30 minutes before the opening bell.
While Lyft’s revenue growth remains strong and it continues to erode Uber’s market cap in the United States, the company continues to lose money. In 2018, Lyft lost $911 million. The company said that it might continue to lose money.
After the hype of the IPO receded, Lyft’s lofty valuation despite no earnings visibility might have scared off some investors.