Investors need to see that Lyft can sustain its growth to justify such a high price, especially with a bunch more shares coming to market.
div > div.group > p:first-child"> But investors are treating the stock very differently than they were on its IPO day.
More than 41.6 million shares changed hands on Monday after 71.5 million shares were traded on Friday. The company only sold 32.5 million shares in the offering, so the market is seeing more traders than long-term buyers. Dropbox provides the closest analogy. It went public last year at a market capitalization of about $8.2 billion. The stock debuted last March at $21, popped right away and even rallied as high as $42 in June. But it's fallen since and is now back near its IPO price.
It's a story that we'll likely hear repeatedly this year, as Uber, Pinterest, Slack and Airbnb all gear up to go public after already capturing very large valuations. Lyft can ease most of those concerns through execution. Back in 2012, Facebook stumbled out of the gate after its much-hyped IPO. The stock fell 11 percent on day two, 9 percent the next day and didn't really recover for five months.
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