Wed. Apr 24th, 2019

Lyft drops more than 7% on Wall Street before Uber's IPO

Lyft drops more than 7% on Wall Street before Uber's IPO

The shares of the transport company on demand Lyft suffered another major setback on Wednesday, falling more than 7%, when investors questioned its value in the face of a possible future IPO of its competitor Uber, which aims to obtain a value of market of at least $ 90,000.

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According to specialized media sources, the value of Lyft's shares has been eroded after its rival Uber, of considerable size, plans to present the official documents tomorrow to be able to offer stakes in the company in New York.

Local media reveal that Uber plans to go public with a valuation of between 90,000 and 100,000 million dollars, and it is believed that it will sell 10,000 million dollars worth of shares.

In addition, several experts suggest that, at this time, Lyft shares are overvalued, and should be around $ 59 each instead of the more than 62 in which it is currently, which is an assessment of the 15,000 million dollar company instead of the current 19,000.

"The driver is an independent actor, and the client is an independent actor, so their business does not have any type of anchoring, and they know it, that is the problem that this type of companies like Lyft has," said the analyst. from CNBC media Aswath Damodaran.

Lyft, which debuted on the stock market less than two weeks ago, on March 29, has experienced a complicated start and shares have fallen from the initial 72 dollars to today's 62, and have fallen more than 9 percent in the past. one week.

Investors have shown their doubts about a company that raises questions about the viability of its business model, since in 2018 it lost 911 million dollars with a turnover of 2,200 million.

As several analysts warned, investors showed more interest in entering offers with much expectation to sell quickly afterwards.


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