Got an offer from Lyft with preferred stock as a big part of comp which they say is currently worth about $47/stock based on their last valuation of $15 Billion. I like the company and it also seems like they are planning on IPOing next year. What effect would you predict the IPO could have on their stock price? Is it super risky or maybe not as much? Even though I like Lyft, is it maybe a better option to maybe stick with a public company like G/FB?
Hi. What is the salary, stock, sign on that they’re offering you? Is ‘preferred stock’ different from a standard RSU?
The main effect that the IPO on the stock price is to make it real. Pre-IPO, the RSU is not fungible. I doubt Lyft won’t go public, but many people here have stories like mine where 1+B $ valuation companies have basically gone bust.
There is usually a small bump at IPO, between insider price and IPO offering price. Surely, the stock can trade lower once it is public. Just look at ARLO in 2018.
My point was that pre-IPO is a state in which the price makes little difference because you cannot sell RSUs without board approval (which you won’t get). If the OP wants to count RSU as part of comp, that’s wrong.. because you can’t spend it when you need it and have no control over when if ever it can be sold. Paper money! “We plan IPO next year” is a very common phrase to hear during recruitment and it’s bullshit. Many companies these days stay private for a very long time for good reasons. You’ll be handcuffed to the RSUs.
Depends on market conditions when they IPO.. and their ability to sustain growth + unit economics. There’s the 6 month lockup period so the first 1-2 quarterly announcements will have a big effect on their stock. That’s also partly determined by how well senior execs communicate with Wall Street.
tc or gtfo
Note that there are several macro economic factors that can affect the stock price aside the company’s performance. It is all about the timing. You should join the company if you believe in it long term instead of just the short term IPO price.
Lyft is not an ambitious company and so wall st will have no mercy on them
Uber is riddled with scandals and poor performance in their autonomous program. If you want to see what happens when shit hits the fan on this level, view FB stock over the last few weeks (bad PR). Also, view Boeing’s stock “BA” (bad product). It’s no bueno.
Can you share the breakdown and level?
Preferred stock ??? Wtf
It's not preferred stock in the sense of typical investor preferred stock. It's hard to get those. It's preferred stock price which basically means based on last round of investment price. In Lyft case it's around $47.
Everyone is expecting Lyft to IPO in 2019 but no one knows for certain. If the stock market keeps on getting hammered, then Lyft (or any other company that IPO’s like Uber) stock will get affected as well (irrespective of their performance). I think Lyft will IPO in next 1-2 years; whether the stock will hold on to its value is to be seen.
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You mean $15B. Near IPO you should use the value of 1x. If you are too risk averse then use the value as 0.8x. If Dropbox can survive 6 months post IPO maintaining their stock price then Lyft could too.
haha my bad, just edited