Lyft (LYFT, Financial)’s highly anticipated initial public offering commenced Friday, with the stock rising as high as 20.4% and enriching its shareholders, including Carl Icahn (Trades, Portfolio) and other notable names.
The ride sharing company that competes directly with Uber priced 32.5 million shares of Class-A common stock at $72 per share Thursday. The lofty price valued the company around $24 billion. Lyft shares briefly reached $86.70 in morning trading before settling down to $78.29 to close the day 8.74% above their IPO price.
One of the investors enjoying the gain is Carl Icahn (Trades, Portfolio) of Icahn Enterprises, who typically buys activist stakes in public companies, with recent campaigns at Caesars Entertainment (CZR) and Newell Brands (NWL). Through Jonathan Christodoro, Icahn Enterprises’ managing director, Icahn owns 12,856 shares of class-A common stock, worth more than $1 million at close Friday.
In May 2015, Icahn disclosed a $100 million stake in Lyft in a round of funding that valued the company at $2.5 billion. At the time, Icahn called investing in Lyft a “no-brainer” when Uber, its rival, was valued around $41 billion.
“If you look at the way the market evaluates Uber and then look at the valuation of Lyft, Lyft is a tremendous bargain,” he told the Wall Street Journal at the time.
Other investors participated in early series funding rounds, including Daniel Loeb (Trades, Portfolio)’s Third Point hedge fund. Loeb joined the Series D financing, which raised $250 million in 2014.
Also joining Loeb on the round was Coatue Management, a tech-focused firm run by former Tiger Management investor Philippe Laffont (Trades, Portfolio), whose larger positions include Shopify Inc. (SHOP, Financial) and Twitter Inc. (TWTR, Financial). Both Third Point and Coatue are listed in Lyft’s S-1 schedule of investors.
Other major holders of its common stock were General Motors (GM, Financial) with a 6.88% stake, and Alphabet Inc. (GOOGL, Financial) with 4.73% of outstanding shares.
Lyft was able to create significant buzz around its IPO even as it lost money. According to IPO documents, it increased revenue to $2.16 billion in 2018 from $1.06 billion in 2017. Its net loss for 2018 deepened, however, to $911.34 million from $688.3 million in 2017. The losses grew despite growth in bookings (the amount of dollar value riders spend before deductions) to $8.1 billion in 2018 versus $4.6 billion in 2017.
As competition intensifies in the ride-hailing space, Lyft was able to grow its market share to 39% in December 2018, up from 22% in 2016.
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