Uber’s IPO is reportedly expected to price Thursday and trade Friday, capping months of high-profile IPOs including rival Lyft (LYFT), along with Pinterest (PINS) and Levi Strauss (LEVI) to name a few.
The parade of IPOs typically has been a sign of a peaking stock market, but hedge fund manager Anthony Scaramucci, founder of SkyBridge Capital, thinks this time is different.
“I’m not saying [the market] isn’t going to peak, because I’m a big believer in cyclicality,” Scaramucci told Yahoo Finance at his 10th annual SALT conference in Las Vegas. “There’s a lot of pent up demand for IPOs. There was tremendous amounts of excess regulation during the Obama Administration and the relaxation of that has unleashed this capital market activity, so I don’t think it’s the sign of a top yet.”
Reports suggest Uber is heeding the signals that investors sent to the market after Lyft’s IPO.
Uber is planning to price its IPO at a roughly $90 billion valuation, according to the Wall Street Journal, down from a previous estimate of well over $100 billion.
Lyft shares, which surged to $88 on its IPO day, are now trading at roughly $53 a share six weeks later. That’s a nearly 40% decline.
“Lyft, while it’s shares have gone down, still has a very high market capitalization for a new company,” said billionaire investor David Rubenstein, co-founder and co-executive chairman of The Carlyle Group (CG), which invested in UK ride sharing app Addison Lee in 2013.
Rubenstein isn’t alone in marveling at the multi-billion dollar valuations that are common in today’s IPO marketplace.
Billionaire investor Steve Case, co-founder of AOL, remembers a time decades ago when companies went public at much smaller valuations.
“I remember when AOL went public — it was the first internet company to go public in 1992,” Case told Yahoo Finance. “And we raised $10 million in our IPO and the company that day was worth $70 million. So to now hear about these $100 billion IPOs is a different world.”
Scott Gamm is a reporter at Yahoo Finance. Follow him on Twitter @ScottGamm.
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