Markets Right Now: Stocks open higher; Lyft makes debut


Based on the total number of shares that were to be outstanding after the offering, its market value would be about US$20.6 billion. Yesterday, while interacting with CNBC at an event organized by The Gatehouse in Texas, Buffett responded to a question about Lyft IPO, saying, "I think buying new offerings during hot periods in the market ..." The company was previously valued at $15 billion following its last private funding round in 2018.

Hiroshi "Mickey" Mikitani's e-commerce group Rakuten Inc. owns $2.7 billion of the class A shares.

"We really think this is going to be the best year we've seen for IPOs in ages", Jackie Kelley, Americas IPO markets leader at Ernst & Young, said in an interview.

Lyft revealed a loss of $911 million in 2018, which was 32 percent higher than the loss for 2017 of $688.3 million.

Uber is planning to launch its IPO in April, sources have said.

This all bodes well for the likes of Uber Technologies and Pinterest Inc, which are also planning to go public in 2019 but like Lyft have yet to turn a profit.

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The company's stock rose from a starting price of $72 each to $87.24, valuing Lyft at $28.2bn.

"Without question, investors are looking beyond operating losses to the potential upside", in the ride-hailing industry, said Alejandro Ortiz, an analyst for SharesPost.

Lyft is scheduled to set its official IPO price range on Thursday, with trading on the Nasdaq stock exchange to begin on Friday. However, that could change in the future as the news spreads - the last thing Lyft wants right now is bad publicity. The IPO was led by JPMorgan Chase, Jefferies, Stifel, Nicolaus and RBC Capital Markets, among others.

It's become increasingly common for unprofitable tech companies to go public, and the percentage of money-losing tech companies that entered the market in 2018 rivals 2000, when the dot-com bubble burst, according to data from Jay Ritter, finance professor at the University of Florida. More than two dozen banks were listed in the company's filing as participating in the offering. For the rest of trading that day, though, it climbed less than 1 percent.

Lyft said in filings that its total bookings reached US$8.1 billion, with 1.9 million drivers providing more than one billion rides in the U.S. and Canada.

"Lyft is an attractive name to own to play this transformative ridesharing market opportunity", Ives said in a note to clients, while adding that "we find it hard to be bullish on the name given the risk/reward we see for shares". Lyft's price bump showed there was "genuine demand and excitement", he said.