- Lyft will start trading Friday on the Nasdaq exchange at $72 a share
- That would value the ride-hailing company at $24 billion
- Investors seem keen to get in on this much-anticipated IPO, even though the company has never turned a profit
San Francisco - Lyft set the price for its stock at $72 per share late Thursday, setting the stage for the ride-hailing pioneer's hotly anticipated stock market debut on Friday.
The price is at the high end of revision Lyft made after high investor demand prompted the company to increase its initial goal of fetching $62 to $68 for each of the nearly 31 million shares to be sold in the IPO. The new price sets Lyft's market value at $24 billion, which will quickly change Friday after the shares start trading on the Nasdaq exchange.
Investors embraced Lyft despite racking up $3 billion in debt since its 2012 inception on the premise that its growing popularity will pay off in the long run. The San Francisco company still hasn't turned a profit since co-founders Logan Green and John Zimmer started the service.
Lyft's higher offering price comes after the company's management bankers spent a week meeting with investors to explain why buying into the IPO makes sense even though the company has an uninterrupted history of losses. What's more, Lyft has acknowledged it may be many more years before it starts making money, especially if it's unsuccessful in its efforts to develop a fleet of self-driving cars so it can lower its costs.
Clamoring to buy
The $72 price implies investors are clamoring to buy the nearly 31 million shares that Lyft is selling in its IPO. The shares will trade under the ticker LYFT. Archrival Uber is expected to go public later this spring.
Analysts at Wedbush Securities issued a "neutral" rating on the new stock and put a price target of $80 on it. "This IPO is a 'watershed' event for the tech sector as well as the ridesharing industry that in our opinion has become one of the most transformational growth sectors
of the US consumer market over the past five years," they wrote. They noted that Lyft is now established "as the clear #2 player behind the worldwide leader Uber."
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