Investors Sue Lyft, Alleging IPO ‘Overhyped’

By | April 18, 2019

Lyft Inc. was sued by investors who claim the ride-sharing company overstated its market position when it went public last month, leading to a dramatic plunge in its stock price.

Two separate class-action complaints against Lyft, as well as its officers and directors and underwriters, were filed Wednesday in state court in the company’s hometown, San Francisco.

Since going public March 28, Lyft has declined 17 percent to $59.51. That compares with the offering price of $72. The stock sold off sharply amid larger rival Uber Technologies Inc.’s filing for an initial public offering last week, as investors will soon have another option to bet on the potential of ride-sharing and gig-economy.

The investors claim Lyft was exaggerating in its prospectus when it said its U.S. market share was 39 percent. In both suits, the plaintiffs also dinged the company for failing to tell investors that it was about to recall more than a 1,000 of the bikes in its ride-share program.

The company didn’t immediately respond to an emailed request for comment on the lawsuits.

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Latest Comments

  • April 18, 2019 at 4:27 pm
    Craig Cornell says:
    Marketing? Are you kidding me? Everyone knows about Uber and Lyft. Tech? Say what? The technology to connect drivers with riders isn't that complicated, once the GPS connectio... read more
  • April 18, 2019 at 3:47 pm
    CO_yeti says:
    They aren't losing 30% on each ride. The rides no doubt are priced correctly and able to make money or else no one (VC or investors) would have put money in. They are losing m... read more
  • April 18, 2019 at 2:41 pm
    bob fishman says:
    Rates could be raised by large margins and the experience would still be 100 times better and worth the cost compared to the average ride in a dirty taxi.

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