Getting in on Lyft’s IPO has suddenly become harder than hailing a ride on a rainy night.
On the second day of the ride-sharing company’s IPO roadshow Tuesday, Lyft began telling investors that its planned March 29 trading debut is oversubscribed, The Post has learned.
That means that demand for the tech startup‘s initial public offering has already exceeded the 30 million shares it has been planning to sell at between $62 and $68 a share, which would give it a valuation of between $21 billion and $23 billion.
The San Francisco company’s valuation could go higher than planned as investors clamor to get their hands on a hot stock in an otherwise tepid IPO season, sources said.
One potential Lyft investor said excitement over the offering could push Lyft’s IPO price above $70 a share when it begins trading on the Nasdaq next Friday.
A second investor, who attended the company’s roadshow at Manhattan’s St. Regis hotel Tuesday, said he intends to invest as much as a he can in Lyft’s IPO because he believes it will be more than 10 times oversubscribed by the time it starts trading.
The demand comes after Lyft said it lost a whopping $911 million in 2018 as it slashed prices while trying to steal market share from Uber.
“I’m hearing that investors don’t like the financials but they know this is a hot deal,” said Rett Wallace of Triton Research, a New York-based firm that tracks tech IPOs.
“My biggest concern would be that they price this too high,” said Matt Kennedy, senior IPO market strategist at institutional IPO research firm Renaissance Capital. “We don’t want another Snap,” he said, referring to the 2017 IPO of Snapchat, which was also oversubscribed.
Snap’s stock, which popped 44 percent before crashing in the months to follow, now trades at $10.63 a share, or less than half of its IPO closing price of $24.48 a share.
“It’s not uncommon for big names to get high interest right away, regardless of the fundamentals, and news of a ‘hot deal’ can quickly create a positive feedback loop,” Kennedy said.
One early Lyft investor who stands to do well is Carl Icahn, who could pocket $1.23 billion if Lyft shares trade at the high end of the range next week.
The billionaire investor snatched up $150 million in Lyft shares when the company was valued at just $2.5 billion in 2015 and boosted his stake to $150 million shortly thereafter.
When laying out the $100 million, Icahn secured the option of putting in another $50 million at the same valuation by threatening that he would not invest the $100 million if he did not get that option.
Exuberance for Lyft’s IPO also bodes well for rival Uber, which is expected to kick off its IPO next month, according to reports.