The shares will start trading on the Nasdaq Friday under the ticker, “LYFT.” The offering is expected to close on April 2, according to the company.
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According to its first S-1 filing, Lyft was looking at $62 to $68 per share. Earlier today, our EIC Alex Wilhelm walked us through what a price of $72 per share would value the company at. Check out his explanation, below.
Employing only issued Class A and B shares gives Lyft a valuation of around $20.5 billion. But if you add in seven million shares of Class A stock that were available for exercise as of Dec. 31, 2018, the number goes up. And Lyft has nearly 32 million Class A shares promised through RSUs that hadn’t vested at the end of last year either. Add those in (as most of them will vest), and the valuation goes up even more.
Bottom line: there’s a range of estimates on what Lyft’s new valuation will be, but we can predict it will be around $20 billion.
Let’s go with Reuter’s estimate, of a $24.3 billion valuation. Alex takes us through some interesting math:
At $24.3 billion, Lyft’s $2.16 billion in 2018 revenue provides the firm with a trailing revenue multiple of 11.25. Note that using trailing revenue metrics to calculate multiples makes things look worse (more aggressive, that is) than they really are; using Lyft’s Q4 2018 revenue to set a run rate (multiplying it by four to get a more accurate look at the size of Lyft’s business), Lyft is worth a more modest 9.1 times revenue.
You know the drill (and in fact, might be tired of it): The San Francisco ride-hailing unicorn, with over $4.9 billion in funding, is one of the long-awaited companies making a market debut in 2019. How it performs once it hits the market matters to other companies eyeing an IPO, especially Uber.
Illustration: Li-Anne Dias