Lyft Prices I.P.O. at $72 a Share

on Mar29
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Lyft was not the first ride-hailing company. But it is poised to become the first publicly traded one, and investors’ appetite for its shares proved enormous.

The company priced its shares at $72 each on Thursday, after raising its price range amid significant demand from prospective shareholders. That puts Lyft’s value at more than $24 billion as it prepares to begin trading on the Nasdaq stock market on Friday, under the ticker symbol LYFT.

In total, the company raised about $2.3 billion, having also increased the number of shares that were sold. (That amount could grow if Lyft’s underwriters sell an additional block of shares to meet even stronger-than-expected investor demand.)

The offering marks the arrival of a new generation of Silicon Valley darlings on the public markets. Many of the companies promised new business models, upended established industries such as transportation and triggered a chain effect on how people work and make a living. The public offerings cement the place of the companies in people’s lives, promise millions of dollars in investment gains for their longtime backers and are set to unleash a new wave of wealth in the tech industry.

“With Lyft, obviously, the market is saying, ‘We’re willing to give you the benefit of the doubt on a lot of things,’ given that there are huge uncertainties about its future,” Mr. Ritter said.

At its I.P.O. price, Lyft’s market value puts it within range of old-line auto companies like Ford Motor. It is a significant increase from the $15.1 billion that Lyft earned in its last private fund-raising round last year.

Though Mr. Green and Mr. Zimmer are taking their company public, they will still retain control, following in a long tradition of founder-led technology businesses. The two own special holdings that give them nearly 49 percent of voting shares, despite owning less than 5 percent of the overall stock.

Lyft also plans to give cash bonuses to drivers who have completed a large number of rides for the company, so that they can buy shares at the I.P.O. price. Drivers with 10,000 rides will receive $1,000, which at the $72 price would allow them to buy 13 shares before taxes. Drivers who have finished 20,000 rides will receive $10,000.

Only full-time drivers who have been with the platform for several years are likely to make the cut, said Harry Campbell, an Uber and Lyft driver who runs the driver blog and resource site The Rideshare Guy.

“It was the right thing to do,” he said of Lyft’s cash bonuses for drivers. “If you gave 10,000 rides for Lyft, you actually were a big part of helping build this company.” He added that the I.P.O. was “kind of exciting to be part of” for drivers.

Unlike Lyft’s employees and early investors, who are restricted by a lockup period from selling their shares, drivers will be able to sell any Lyft stock purchased through the cash bonus program as soon as the company begins trading on the public market, according to an email sent to qualifying drivers and reviewed by The New York Times.

But the cash bonuses ultimately did not satisfy many drivers, who work as freelancers for Lyft and Uber and do not receive full-time employee benefits. This week, hundreds of them protested in San Francisco and Los Angeles against lower pay rates.

“If political will starts to shift against Uber and Lyft, that’s a scary proposition,” Mr. Campbell said.



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