Shares of Lyft sank as much as 11 percent Monday, falling below the stock’s IPO price in its second day of trading on the public market.
The stock traded as low as $69.12 a share just after market open, more than 20 percent below its Friday intraday high of $88.60. More than 16 million shares had changed hands as of 10 a.m. ET.
The stock sold at an initial IPO price of $72 in an oversubscribed offering.
The ride-hailing company is the first of a heavyweight class of tech companies to go public this year. The stock jumped as much as 23 percent in its opening day Friday before settling to a 9 percent gain. The company had a market cap of about $22 billion Friday. It’s market cap Monday morning was about $19.8 billion.
“Falling below its IPO price is a gut punch for investors and Lyft,” Wedbush managing director Dan Ives said in a statement to CNBC. “This is a pivotal few weeks of trading ahead to gauge Street demand for the name as valuation and profitability continue to be the wild cards for tech investors.”
Lyft revealed a 2018 loss of more than $900 million in regulatory filings ahead of its IPO. The stock carries “too many big assumptions” for success, according to analysts at Guggenheim.
Lyft’s market debut offers something of a gut check for Uber, Slack and Pinterest — all tech behemoths set to go public this year. Pinterest booked a 2018 net loss of $63 million. Slack and Uber have only filed to go public confidentially, and have yet to publicly report audited financials.
Video-conferencing company Zoom, which recently filed to go public, represents the rare tech IPO with profits already on the books.