Lyft shares sink below IPO price

Lyft shares were out of gas in their second day as a publicly traded company.

The San Francisco-based ride-hailing company’s stock tumbled as much as 11.7 percent Monday — falling below its $72 a share initial public offering price — as investors rushed for the exit of the money-losing company.

“The Lyft IPO has traded poorly,” said Kathleen Smith, manager of IPO ETFs at IPO research firm Renaissance Capital. “It was offered at a high valuation and investors are not sure what these money-losing unicorns are worth.”

In their debut on the Nasdaq Friday, Lyft shares had surged 21 percent — briefly flirting with a $30 billion valuation in early trades — but lost steam to end up a more modest 8.7 percent.

The offering was oversubscribed and priced above its expected $62 to $68 a share range as Wall Street initially looked past Lyft’s massive $911 million loss in 2018 for a chance to get in on the hotly anticipated IPO.

“[Lyft’s trading] confirms that jumping into IPOs on the first day of trading can be problematic for investors,” Smith said.

Lyft’s volatile trading is expected to influence the pricing of other unicorns that are expected to go public this year. Ride-sharing rival Uber, which lost $1.8 billion in 2018, is expected to go public next month at a valuation exceeding $100 billion.

“It means that the IPOs coming up — Pinterest, Uber — will be priced more reasonably,” Smith said.