Lyft fell below its IPO price on its second day of trading.
Lyft (LYFT) shares quickly dipped below the $72 mark in early trading Monday, erasing all gains from its highly anticipated Wall Street debut on Friday. It ended the day at $69.01 a share, a decline of nearly 12%.
The company initially saw shares spike by more than 20% over its IPO price on Friday as investors flocked to buy up shares from the first ride-hailing company to go public. But Lyft stock ended Friday up 8.7%.
Although analysts have expressed optimism about Lyft’s market share gains relative to Uber and the potential of the broader ride-hailing market, there are some red flags for the company.
“This is staggering what we’re seeing here. Staggering,” Kathleen Smith, principal at Renaissance Capital, which manages IPO-focused exchange-traded funds, previously told CNN Business. “The profitless prosperity model doesn’t work in the public market.”
Lyft’s Wall Street debut is seen as a bellweather for the long list of billion-dollar tech startups expected to go public later this year, including Pinterest, Slack, Postmates and Uber.