6 ms·

Might be a bit premature to write these headlines? The day isn't over. At least that's a benefit of printed papers.

by jak92 8y ago

harveywi 8y ago
The bigger question will be how Lyft handles the markets longer term, whether it continues to rise or faces the "Snap" effect.
- giancarlostoro 8y ago
  The term is market correction. https://en.wikipedia.org/wiki/Market_correction https://en.wikipedia.org/wiki/Market_correction
nerdkid93 8y ago
I thought it was shocking since yesterday the rumored price was $72. That's a pretty big disparity.
- kenneth 8y ago
  The price that Lyft sold newly issued shares at yesterday was $72. They raised $2B at that price. Some of those investors put up their new shares into public markets this morning and got a handsome profit.
  - gtr32x 8y ago
    I'm curious how true this is, don't they have lock-up periods? Would love to get educated here if that's not the case or there are exceptions.
    - shereadsthenews 8y ago
      No, when you buy shares in an IPO they are yours immediately. Otherwise where would the liquidity come from?
    - raiyu 8y ago
      The lockup period is for existing shares that affect employees, founders, and prior investors. The new shares that are issued and then sold at the IPO offering price are able to be traded immediately and this is where the volume comes from. In order to be a buyer of an IPO you need to have a tremendous amount of net worth, think 10’s of billions of dollars, you need to have a relationship with a bank, and you need to subscribe to all of the IPOs on the calendars, not just cherry pick the ones that you want. The entire IPO process is really a very limited market place to a very select few buyers and these are typically very large endowments, mutual funds, and so forth. In order to assure the company that they have buyers, they promise a return to those buyers in the price popping immediately after the IPO, otherwise the IPO pricing loses it’s allure. In a Dutch auction, typically new shares aren’t created, and instead existing investors sell shares. This means that the company doesn’t get any of that cash on it’s balance sheets. This is done when the company is profitable, or has enough cash reserves to become profitable in the near future and the investors then want to get all of that pop by offering those shares directly. Now for investors in a regular IPO, it’s also ok for investors, because while the company gets a bit less cash on its balance sheet, the investors shares are valued immediately on the public market and have the benefit of the pop. With the idea being that they will retain this higher value post the 6 month lock up. However, you will already have two sets of quarterly results typically in that window in which case Wall Street will continue to evaluate the stock. If you can hit your projections you will be in good shape, however, if there are any misses, as was the case with Snap, all of that exuberance was tied to impossible numbers so the reset can be quite harsh. And in public markets, that reset is instantaneous, because as soon as the news hits the market cap is immediately affected as shares are then traded on this news.
      - chollida1 8y ago
        > In a Dutch auction, typically new shares aren’t created, and instead existing investors sell shares. This means that the company doesn’t get any of that cash on it’s balance sheets. This is done when the company is profitable, or has enough cash reserves to become profitable in the near future and the investors then want to get all of that pop by offering those shares directly. This is wrong. Typically its still the company that sells shares. Infact Dutch auctions vs typical IPO's are orthogonal to who sells shares. In both case the vast majority of the time its the company selling shares from its float.
shereadsthenews 8y ago
Well, isn't the "pop" the delta between the offering price and the opening trade? You don't need a close for that.
fullshark 8y ago
It's a developing story that you don't need to follow, but a lot of stock market analysts are likely very curious how it goes today for Lyft.
warp_factor 8y ago
The stock is in free fall right now. It popped because it was so much hyped accross regular investors. Right now I predict that one week from now it will go under the 72$ opening price
mr_spothawk 8y ago
10 hours later and its 8.74%

Might be a bit premature to write these headlines? The day isn't over. At least that's a benefit of printed papers.

by jak92 8y ago

Might be a bit premature to write these headlines? The day isn't over. At least that's a benefit of printed papers.

The bigger question will be how Lyft handles the markets longer term, whether it continues to rise or faces the "Snap" effect.

giancarlostoro 8y ago
The term is market correction. https://en.wikipedia.org/wiki/Market_correction https://en.wikipedia.org/wiki/Market_correction

nerdkid93 8y ago

I thought it was shocking since yesterday the rumored price was $72. That's a pretty big disparity.

kenneth 8y ago
The price that Lyft sold newly issued shares at yesterday was $72. They raised $2B at that price. Some of those investors put up their new shares into public markets this morning and got a handsome profit.
- gtr32x 8y ago
  I'm curious how true this is, don't they have lock-up periods? Would love to get educated here if that's not the case or there are exceptions.
  - shereadsthenews 8y ago
    No, when you buy shares in an IPO they are yours immediately. Otherwise where would the liquidity come from?
  - raiyu 8y ago
    The lockup period is for existing shares that affect employees, founders, and prior investors. The new shares that are issued and then sold at the IPO offering price are able to be traded immediately and this is where the volume comes from. In order to be a buyer of an IPO you need to have a tremendous amount of net worth, think 10’s of billions of dollars, you need to have a relationship with a bank, and you need to subscribe to all of the IPOs on the calendars, not just cherry pick the ones that you want. The entire IPO process is really a very limited market place to a very select few buyers and these are typically very large endowments, mutual funds, and so forth. In order to assure the company that they have buyers, they promise a return to those buyers in the price popping immediately after the IPO, otherwise the IPO pricing loses it’s allure. In a Dutch auction, typically new shares aren’t created, and instead existing investors sell shares. This means that the company doesn’t get any of that cash on it’s balance sheets. This is done when the company is profitable, or has enough cash reserves to become profitable in the near future and the investors then want to get all of that pop by offering those shares directly. Now for investors in a regular IPO, it’s also ok for investors, because while the company gets a bit less cash on its balance sheet, the investors shares are valued immediately on the public market and have the benefit of the pop. With the idea being that they will retain this higher value post the 6 month lock up. However, you will already have two sets of quarterly results typically in that window in which case Wall Street will continue to evaluate the stock. If you can hit your projections you will be in good shape, however, if there are any misses, as was the case with Snap, all of that exuberance was tied to impossible numbers so the reset can be quite harsh. And in public markets, that reset is instantaneous, because as soon as the news hits the market cap is immediately affected as shares are then traded on this news.
    - chollida1 8y ago
      > In a Dutch auction, typically new shares aren’t created, and instead existing investors sell shares. This means that the company doesn’t get any of that cash on it’s balance sheets. This is done when the company is profitable, or has enough cash reserves to become profitable in the near future and the investors then want to get all of that pop by offering those shares directly. This is wrong. Typically its still the company that sells shares. Infact Dutch auctions vs typical IPO's are orthogonal to who sells shares. In both case the vast majority of the time its the company selling shares from its float.

shereadsthenews 8y ago

Well, isn't the "pop" the delta between the offering price and the opening trade? You don't need a close for that.

fullshark 8y ago

It's a developing story that you don't need to follow, but a lot of stock market analysts are likely very curious how it goes today for Lyft.

warp_factor 8y ago

The stock is in free fall right now. It popped because it was so much hyped accross regular investors. Right now I predict that one week from now it will go under the 72$ opening price

mr_spothawk 8y ago

10 hours later and its 8.74%