Monday was a different story. Lyft shares crashed in early trading - offering a sobering lesson on the risks of jumping in on the opening trading day of a hot company,and closed 11.9 per cent down at $US69.01,wiping around $US3 billion ($4.2 billion) off its market cap.
"It's a good example of why people should approach IPO investing cautiously,"said Kathleen Smith,a principal at Renaissance Capital,which manages IPO-focused exchange-traded funds."This company has large losses and will not be profitable in the near future."
Lyft is the first ina wave of highly anticipated,so-called unicorn companies that are expected to hit the public markets this year. Uber,Pinterest,Slack,Airbnb and Palantir Technologies are among the big names being teed up to go public.
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Both Lyft and Uber,two high-profile disrupter companies,have yet to make a profit. Lyft said in regulatory filings last week that it posted a $US900 million loss last year. Money managers say it's too early to know whether the ride-sharing companies will become great businesses - or not.
"Right now,there is a lot of exuberance and excitement,"said Nicole Tanenbaum,chief investment strategist at Chequers Financial Management."But at the end of the day,you're betting on the long-term profitability of these companies. The path to that profitability is still unclear. A lot of assumptions are being made. Sometimes it works out to be a good business like Facebook. Not always."
Facebook has been a massive roller-coaster ride for investors.