It's been an eventful first few days of trading for Lyft (NASDAQ:LYFT). The country's second most popular car-sharing service has been a hot debutante, a broken IPO, and a sentimental turnaround story in just its first six days of trading. One can only imagine the kind of volatility that will follow when Uber hits the market later this year.
The publicly traded saga started two Fridays ago, when underwriters priced Lyft's IPO at $72, valuing the company at more than $20 billion. A week earlier, the deal was expected to price between $62 and $68, but even the last-minute bump to $72 wasn't enough to satisfy the initial demand from retail investors. The stock opened at $87.24, peaking at $88.60 within moments of its first trade. It was all downhill from there.
The fall of Lyft
It didn't take long for the boo birds to start chiming in. The stock hit the market too high, bears argued. Lyft revenue more than doubled in 2018, but is that worth applauding when Lyft closed out the year with a $911.3 million deficit in the process?
Many of the early analysts weren't impressed, and one even suggested that a price target of $42, less than half its opening price, was where the stock should be. Lyft shares stopped Lyft-ing, and a sell-off ensued. Despite all of the hype leading up to its blowout debut, Lyft stock closed as a broken IPO, below $72, on its second day of trading.
The rise of Lyft
The shift from feast to famine was swift, but then sentiment began to turn bullish again. The stock has risen for the past three trading days, including closing exactly at its $72 IPO price on Thursday before moving another 3% higher on Friday. There was a bullish analyst note, with Daiwa's Jairam Nathan initiating coverage of the stock with a "buy" rating and an $80 price target. We also saw Citron Research, a source that typically bashes potentially overpriced stocks, actually warning about shorting Lyft at this point.
The next few days, weeks, and months will continue to be as volatile as the first six days of trading for Lyft. We have yet to hear from the 20 analysts that took the stock public a little more than a week ago, and it's fair to say most of them will be bullish if the stock buckles below $72 again by the time they're ready to comment.
Fasten those seat belts, Lyft investors. This is going to be a wild ride.