Lyft’s IPO Price Expected To Rise Ahead Of Friday Debut

Morning Markets: Lyft may raise the price of its IPO, boosting its valuation and potentially raising more cash for the American decacorn. The company’s shares are set to begin trading on Friday.

Ahead of its impending IPO, Lyft is enjoying a spot in the sun.

After early demand quickly filled its books, the American ride-hailing giant appears set to raise the price of its shares sold in its public offering.1

Lyft has set an initial, proposed price range that would have boosted its valuation from $15 billion to the low-$20s. Such a jump in value was likely welcome by its private-market investors. Now, public-market demand appears set to make those backers even wealthier when the company begins trading.

We’ll bring you the final share price, valuation, and raise figures on Thursday evening when the company prices, and results of its first day’s trading on Friday when it floats.

Changes

As reported in the the Wall Street Journal, Lyft’s per-share price should rise by double-digit percentage points. According to the paper:

While it is unclear what level it will pick when the shares are priced late Thursday, it is unlikely to be as high as $80 and is more likely to be in the low $70s, some of the people said.

Lyft initially targeted a price between $62 and $68 per share for its IPO. A price of $75 per share would value the firm at 10 to 20 percent more, using the high and low points of its initial range compared to our new, theoretical per-share price.

Thus the company’s valuation could rise by a similar amount. As Lyft was set to be worth up to $23 billion with its first price range, we can easily see Lyft rising to in the high 20s when we adjust its valuation by the same percent that its per-share price may rise.

At this time it doesn’t appear that Lyft will crack the $30 billion mark before going public.

The figures are useful for pricing other market players. Lyft reported $2.16 billion in revenue last year. Let’s presume for a moment that Lyft’s valuation comes to $27 billion after it prices its shares higher based on demand. At that price point, Lyft would be worth around 12.5x trailing revenues. That could help price Uber in its impending IPO, whether Uber agrees with the price range or not.

For now, the Lyft IPO is showing all the signs of an interested market. More when it prices.

Illustration: Li-Anne Dias