Lyft's IPO Could Be a Huge Boost to Uber's Offering
Lyft's success in its trading debut Friday may have been just what Uber needed for its initial public offering.
While there may have been some concern that a big Lyft valuation would indicate a meaningful pull of investors' money away from Uber's IPO, one expert said Lyft's $87 per share opening price is great for the bigger ride-hailing company.
The first trade Friday for Lyft stock was $87.24, 21% above the offering price of $72.
"The bigger story with Lyft's IPO and the demand we've seen is ... what it means for the other IPOs to come this year," said Alejandro Ortiz, principal analyst at Sharespost, a provider of liquidity and research to investors in private companies, specifically unicorns.
"Uber comes to mind." "What we're seeing with Lyft is high demand right now -- high demand for these high-growth companies, and that's really the story here," Ortiz said.
Moreover, "Lyft doing well obviously bodes well for Uber.
They're ride-sharing giants -- one's focused on the U.S., one's a global company, but investors have shown demand for ride-sharing," he added.
Timing is important for Uber's IPO.
With the three main benchmark stock indexes trading sharply higher so far in 2019 - a year that has seen slower economic growth - investors could soon flock out of growth stocks and risk assets.
"I don't see any value in waiting," Ortiz said.
"The Nasdaq is performing better than any time in the same time period over the past six years... That being said, I don't think Uber should wait ... We don't know where we'll be six months from now, so while sentiments are up, it's a good time to go public." Related.
Lyft and the IPO Casino.
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