Lyft is being sued by some investors who say the company exaggerated its market position during its IPO in March, which they say led to a shedding of stock value.
Bloomberg reported there are two class-action lawsuits against the company, as well as against underwriters, officers and directors. The lawsuits were filed on Wednesday, April 17, in San Francisco.
Lyft went public on March 28, and its stock’s value has gone down 17% since that day. Its offering price was US$72, but it has dropped to the US$59 range. The stock was affected by Uber’s own IPO, which gave investors a different horse to bet on in the ridesharing industry.
The suing investors say Lyft overinflated its value in a prospectus, in which it said it had 39% market share. Both suits also claim the company didn’t tell investors that it had recalled 1,000 bikes in its rideshare endeavor.
PYMNTS’ Karen Webster wrote about the difference between the two companies on Monday, April 15. As she noted, Uber filed its S-1 on April 11, two weeks after the Lyft IPO. Lyft’s stock was trading at US$59.90 a share by the close of business on April 12, and it was 20% off its high of US$75 at the end of the first day of trading.
“Lyft’s market cap was a bit lighter by the end of the day on April 12, too: $17 billion versus the $23 billion it enjoyed, albeit briefly, on its first day as a public company,” she noted.
“Pundits attribute the drop to overzealous investors who may have since sobered up, perhaps even
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