Despite a very positive day for the markets, Lyft plunged close to 12 percent on Monday in its first full day of trading since its public debut. The ride-hailing company closed the day at $69.01 per share, well below its IPO price of $72.

Ted Bauman, economist and editor of “The Bauman Letter” at Banyan Hill Publishing, told Cheddar he wasn’t too surprised by the drop, since Lyft’s ($LYFT) shares were likely over-priced to begin with.

“One of the critical things to remember about IPOs is they often stand for ‘it’s probably overpriced,'” Bauman said. “More importantly is what happens in the future, and right now the analyst sort of position on Lyft is not all that strong.”

The ride-hailing company made its highly anticipated public debut Friday, becoming the first of a slate of buzzy startups to enter the public markets. Its shares opened for trading at $87.24, up nearly 20 percent from its offer price one day earlier.

Bauman said that Lyft and its rival Uber are hurting their case, rather than helping it, by pitching themselves as autonomous vehicle technology companies, because that pits them against giants like Google parent company Alphabet ($GOOGL).

“In that space, they are not competing with each other, they are competing with other tech companies that are already deeply involved in autonomous vehicles,” Bauman said. “I don’t see the value proposition there if that’s the space they want to compete in.”

Some analysts remain bullish on Lyft. D.A. Davidson, for example, issued a “buy” rating on Lyft before it even began trading, and Wedbush issued Lyft a “neutral” rating, but set an $80 price target.

The tech-heavy Cheddar 50 Index, which measures the performance of Cheddar’s 50 top companies ー from Apple ($AAPL) to GM ($GM) ー closed up 2.1 percent on Monday, boosted by top performers Roku ($ROKU) and Eventbrite ($EB).

Meanwhile, the Dow Jones Industrial Average closed up 329.7 points, or 1.3 percent, the S&P 500 closed up 1.2 percent, and the Nasdaq also gained about 1.3 percent on Monday.

~source