By Joshua Franklin
NEW YORK (Reuters) – Lyft Inc’s initial public offering (IPO) is oversubscribed based on commitments made so far by investors, making it more likely that the ride-hailing startup will fetch or even exceed the $23 billion valuation it is seeking, people familiar with the matter said on Tuesday.
The development indicates that many investors are willing to overcome uncertainty over Lyft’s path to profitability and its strategy for autonomous driving, for fear of missing out on the biggest and most high-profile technology IPO since Snap Inc in 2017.
Lyft started its IPO road show on Monday and has spent the last two days meeting with investors in New York, the sources said. It has set an indicative IPO price range of $62 to $68 per share and is set to price the IPO on March 28.
The exact level of oversubscription could not be learned. The sources cautioned that the IPO price is still uncertain and they asked not to be identified because the matter is confidential.
Lyft declined to comment.
Lyft’s progress in its IPO could bode well for larger rival Uber Technologies Inc, which is planning to kick off its IPO in April, Reuters has reported. It has been valued by investment bankers at as much as $125 billion.
Lyft said on Monday it aims to raise up to $2 billion in its IPO at a fully diluted valuation of as much as $23 billion, which includes restricted stock.
There will be more meetings in Boston and New York this week between investors and co-founders Logan Green and John Zimmer, as well as Chief Financial Officer Brian Roberts and Catherine Buan, vice president of investor relations.
Lyft is pitching investors on the simplicity of its business, while Uber is expected to play up its more diversified strategy, according to the sources.
Rob Lutts, chief investment officer of Cabot Wealth Management in Salem, Massachusetts, said the transition to autonomous vehicles would be “hugely disruptive” for Lyft and found the company’s IPO documents did not offer much detail on its plans.
“I’m not sure they’ve figured out what they’re going to do. It’s early days for all of that,” Lutts said.
(Reporting by Joshua Franklin in New York; Additional reporting by Ross Kerber in Boston and Carl O’Donnell in New York; Editing by Phil Berlowitz and Susan Thomas)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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Updated Date: Mar 20, 2019 03:05:15 IST