Ever since ride-hailing start-up Lyft (LYFT -0.37%) debuted as a public company, shares have been on a general decline. 

The stock began trading in late March at $72 a share but immediately plummeted as investors expressed concern about its ability to turn a profit. It didn't help that it disclosed a more than $900 million loss for 2018 in its IPO filing with the Securities and Exchange Commission. 

But in what may be a sign of good news, the stock was pretty stable earlier this week on the first day the lockup on shares expired. Lyft had originally scheduled the lockup expiration for September 24, but with that date landing during its so-called earnings blackout period, it pushed the date up. 

IPO on a card held by a hand.


Lyft pushes up lockup period expiration, investors fret 

Typically the first lockup period, or amount of time early investors and insiders are required to hold the stock before selling, is six months after an IPO. But because Lyft moved it up, investors feared shares would plummet as more supply came into the market. Lyft had previously said around 88% of its total shares, or 257.6 million, would be eligible for purchase if insiders unloaded their stakes. 

The bloodletting didn't come to pass as many pundits predicted. The stock ended the session down, but not as much as feared, surprising Wall Street and investors alike. 

 Sure Lyft has its fair share of venture capital investors who would want to sell, but mutual funds and asset managers got a piece of the IPO too, and are more the buy- and- hold type. Others said it was Lyft's second-quarter results and guidance for the coming quarter that prevented the sell-off. 

Heading into Lyft's IPO investors and analysts were concerned about the path to profitability for the ride-hailing start-up that competes head-on with Uber Technologies (UBER -1.05%). After all, it disclosed in the IPO filing it had a net loss of $911.3 million for all of 2018, up from $688.3 million in 2017. It was that loss, the biggest for any company as it headed into its IPO, that had investors skittish. Lyft and rival Uber are in a cut-throat war for customers and have been willing to absorb big losses to meet that end. But with no clear path to profitability, it spooked investors, sending the stock more than 25% below its IPO price. 

Investors are starting to believe in the story 

Without getting into the minds of investors, there isn't one absolute reason why they didn't unload shares when they could, but it may be due to its guidance for the third quarter. When reporting second-quarter results earlier in August, Lyft said it expects revenue to be between $3.47 billion and $3.5 billion for the year. That's higher than its past target for revenue in the $3.275 billion to $3.3 billion range. It also expects its losses to decline with its EBITDA (earnings before interest, tax, depreciation, and amortization) loss now forecast to come in between $850 million and $875 million. Previously Lyft targeted an EBITDA loss of between $1.15 billion and $1.175 billion. 

It also offered up evidence growth isn't slowing, another concern among investors. The number of active rides increased to 21.8 million during the second quarter. Wall Street had expected Lyft to have 21.1 million active riders. Lyft's co-founder and chief executive Logan Green said the company was able to achieve record revenue because of the active riders growth. "As a result of this positive momentum, we anticipate 2019 losses to be better than previously expected," said Green in a press release announcing second-quarter results. 

For the investors who opted to hold onto their shares, it signals they believe in the story and the market opportunity for ride-hailing services. We're still only a few months into its life as a public company, but things are looking up for Lyft.