CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Six things to know about Lyfts IPO

Article By: ,  Financial Analyst
March 28, 2019 4:03 PM

Lyft’s IPO price is rising, but could it do a U-turn when trading begins on Friday?

The online taxi app now sees a range between $70 and $72 per share. That’s up from $62-$68. It shows that despite red flags like growing losses and a dominant rival, Uber, FOMO around 2019’s biggest IPO so far could create the type of ‘pop’ investors typically want. But with 2018 revenue doubled at $2.16bn and cash burn up a third to $911m, sentiment could yet make a sharp U-turn. Here are six things traders need to know before the launch.

  1. Lyft's IPO is now heavily oversubscribed, attesting to strong demand. Share supply fell short of demand just two days into its investor roadshow, last week
  2. The mid-point of its new price range, $71/share would rake in $2.1bn in new equity capital
  3. The upper end of Lyft’s new range gives a market capitalisation of $20.25bn, slightly topping Snap’s IPO value. Lyft's final round of private fund raising in 2018 valued it at $15bn
  4. Apart from lack of profitability, challenges to a stable Lyft valuation include costs related to processing transactions and investments in its scooter business
  5. It is also lagging Uber in rebalancing the share of revenue it shares with drivers, having begun to reduce driver benefits three years ago. Doing so now is even trickier, with average Uber driver pay rising again. Regulatory pressures, like a likely move to a minimum wage for New York City drivers, could also disrupt cost plans
  6. On the plus side, there is plenty of evidence that Lyft growth rates remain healthy. It recently announced that it has passed the 1 billion ride mark, around a year after reporting 500 million riders from inception in 2012. Dividing that by 12 months (ignoring seasonal differences) equates to just under 50 million riders a month, more than double the volume reported by the Wall Street Journal in December 2017

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024