Lyft IPO News
So, let’s talk about Lyft IPO.
Today was the second day of trading, and Lyft is right now trading below its IPO price.
Lyft, the ride share company, started trading on Friday, and at first, everybody was excited.
Let's take a look at the charts to see what happens here.
Lyft was already plummeting, going down. The IPO price was $72. Now again, on Friday, at first everybody was happy.
The stock was going up to $86, but right now its trading at $69. So, below the IPO price.
Now, let's first talk about what does IPO mean?
IPO, Initial Public Offering, means that the company is now for the first time ever, traded at an exchange.
You see, this is where everybody was so hyped up about Lyft.
And I remember this happening many years ago with Twitter and Snapchat. Exactly the same thing. Everybody got so excited and thought they made a lot of money if they could just get in on this so-called IPO.
But you know what? In 2018 and before, there were several IPOs. Most of these IPOs end up very badly. Especially when they're being hyped up.
Let's take a look at some of these IPOs here.
One of the IPO is that everybody got excited about a couple of years ago was…
And at first, Snapchat started trading at $28 and look at this, went as low as $6, right now trading at $11.36. So, obviously, that didn't work out.
Then we had ADT
The security company, right? They're providing security for housing and everybody got excited about this.
So, they had an IPO in 2018. January 2018 were trading at $13. So, they started at $11.47 and you see, exactly the same thing happened. At first, they went up. They went up from $11.47 to what? $12, almost $13, and then boom.
Crashed and burned, trading at $6.25, so down 50%.
Another one everybody got excited about was Spotify.
So, here, the IPO... really, really high. So, they started trading at $165.90 and as you can see, at first everybody got excited. They got up to $195 but then crashed to $110.
Right now, recovering a little bit, trading at $140 but you see…
This is why these IPOs that everybody is getting excited about don't make sense.
Let me show you a few more examples.
Who remembers this? Last year everybody got excited about the Tesla of China.
NIO started trading at $12.66, right up here. And look at this. Right now, trading at $5.21. So, also lost half of it.
Another is Dropbox.
Who knows the Dropbox? We're using it actually in our company. Let's see its DBX actually. So, DBX is the symbol here for Dropbox.
The IPO is at $30.45, right now trading at $21.50. Went up to $42 and now also cut in half.
It’s really hard when you’re looking at the exchanges or watching any of the News. CNN, or Bloomberg TV, or whatever it might be then you might have heard about Lyft, and how everybody got excited about this.
But you see, Lyft is actually having this same fate as most of the other IPOs.
There were only two IPOs that were successful.
And these are IPOs from companies that probably nobody cares about, right?
Here's one. This is from GOOS. Canada Goose holdings. It is a clothing company, and yes, they started off around 16. And it's now trading at $48.
So, that was a successful fund.
But again, not many people got excited about this. Did you know that there is a Canadian Goose company, which is a clothing company?
Here's another one that worked out thus far which is DocuSign.
But as you can see, DocuSign also very, very rough here. Started the IPO at $38, went all the way up to $68, from there, crash down back to $38. So, this looked pretty, pretty bad but DocuSign was able to recover.
So, if we look at these... what is it? Seven or eight IPOs, right?
What's happening here?
Most of them are failing and this is what we see right now that Lyft could actually join the same fate here.
It started at $72, went up all the way to $86, but today, on only the second day of trading, is already trading below its price, its opening price of $72. So, today's closed $69. Today, down 11.85%.
Hope this was helpful to learn a little bit more about IPOs because I get this question asked a lot where people say, OK. So, what do you think about the Lyft IPO? Should I get in?
And my advice...
No! Trade what you see, not what you think.
If this was helpful, please, leave a comment and let me know.
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