- Lyft shares have fallen 30% since the stock first hit the market in late March, and they have fallen 11% from the company’s first closing price.
- But this kind of volatile trading isn’t uncommon for newly public companies, especially as short sellers swoop in and try to capitalise on an initial public offering (IPO)’s early hype wearing off.
- Facebook, which debuted in 2012, saw a similar trajectory in its first few days of trade before recapturing its IPO price – over a year later.
- Watch Lyft and Facebook trade live on Markets Insider.
Lyft‘s early days as a public company have been dismal, at least as far as the price of its newly issued shares are concerned.
The ride-sharing company’s stock is down 30% from its opening print late last month. It’s off 11% from the close of its first trading session. It dropped below its IPO price in its second trading session.
While this kind of trading isn’t uncommon for newly public companies – particularly as short sellers swoop in and try to capitalise on an initial public offering (IPO)’s early hype wearing off – it still may serve as a warning for the other high-profile unicorns expected to go public this year.
To place into context Lyft’s trading thus far, Markets Insider compared its post-IPO performance to that of Facebook, which went public in 2012 to much fanfare and quickly turned south. “Facebook IPO: What the %$#! happened?” a CNN headline read shortly after the debut.
Facebook shares dropped nearly 30% in its first nine days of trading, going by the change since the close on the first day of trading; Lyft has dropped about 20% by that same measure. Sure, Facebook eventually recouped its post-IPO losses – 15 months later.
Only time will tell what direction Lyft is headed, and it’s so early in its lifetime as a publicly traded company, but bullish investors know one thing for sure: its first few days of trading have been anything but a smooth ride.
Now read more markets coverage from Markets Insider and Business Insider:
- Traders are already mounting a $US455 million bet against Lyft, now the most expensive US stock to short
- Lyft takes a big hit after reports Uber is seeking a valuation of up to $US100 billion
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