Ridesharing platform Lyft (LYFT) recovered from the recent volatility and lifted the spirits of the market Friday, a week after its disappointing IPO. Shortly after the initial spike that followed the debut, the stock was trading lower. It pared most of the initial gains and had remained below the IPO price throughout the week.
The San Francisco-based online taxi giant had debuted on the Nasdaq at $87.24, making an initial gain of 21%, but ended the first day’s session at a sharply lower valuation. On Friday, the stock gained more than 5% in early trading and rose above the IPO price of $72 once again.
With the stock entering the recovery path, the general perception is that the uptrend will be sustained in the coming days. Meanwhile, Reuters reported that Friday’s upturn was the results of a statement issued by a popular short-seller, asking investors to hold on to Lyft.
With the stock recovering and moving above the IPO price, the general perception is that the uptrend will be sustained in the coming days
In 2018, the company recorded a net loss of $911 million, despite revenues growing two-fold on a year-over-year basis. Going forward, the investors will be looking for specific updates from the company about its turnaround strategy.
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With the number of active riders increasing sharply in the last couple of years, Lyft currently operates in 300 markets and holds around 39% of the ridesharing market in the US, which is dominated by rival Uber. Uber is slated to go public later this year, in line with the rapid expansion of the online taxi business that is forecast to become a $300-billion industry by 2030.
After starting Friday’s trading, Lyft reached a peak of $75.83 in the initial hours, before slightly losing the momentum towards the end of the session.