Lyft raises price target as investors fear missing out on biggest IPO in years

FILE PHOTO: The Lyft logo is seen on ride-hailing car in Manhattan in New York City, New York, U.S., March 4, 2019. REUTERS/Mike Segar/File Photo

(Reuters) – Lyft Inc (LYFT.O) on Wednesday raised the price range for its initial public offering to between $70 and $72 per share, meaning the ride-hailing company is now targeting a valuation of up to $24.3 billion.

The increased range from $62-$68 previously is the result of the IPO being oversubscribed and is a further indication that investors do not want to miss out on the biggest U.S. IPO in years.

Lyft’s IPO was oversubscribed just two days into its investor roadshow, Reuters reported last week. [nL1N2161HD]

At the upper end of the new range, Lyft would have a market capitalization of $20.45 billion, a little larger than Snap Inc (SNAP.N) when it went public in 2017. At this size, it would be the biggest U.S. IPO since Chinese e-commerce Alibaba Group in 2014.

At the mid-point of its new target range, $71 per share, Lyft would raise roughly $2.1 billion.

The increased price range indicates many investors are willing to overlook uncertainty over Lyft’s path to profitability and its strategy for autonomous driving, for fear of missing out on such a high-profile technology IPO.

Lyft’s revenue was $2.16 billion for 2018, double the previous year’s and far higher than $343 million in 2016. It posted a loss of $911 million in 2018 versus $688 million in 2017.

The company’s progress in its IPO could bode well for larger rival Uber Technologies Inc [UBER.UL], which is planning to kick off its IPO in April, Reuters has reported. It has been valued by investment bankers at as much as $120 billion.

Lyft’s IPO is set to price on Thursday with shares scheduled to begin trading on the Nasdaq on Friday.

Reporting by Joshua Franklin in New York and Diptendu Lahiri in Bengaluru; Editing by Anil D’Silva and Lisa Shumaker

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