Look to IPO ETF as Lyft Sets Off
This article was originally published on ETFTrends.com.
As Lyft Inc. made its initial public offering documentation public Friday, fueling speculation on the potential start to one of the biggest years for tech IPOs ever, investors can also gain exposure to the fervor through an outperforming IPO-themed exchange traded fund strategy.
Lyft's IPO documentation sets the company to begin trading in late march and to start its so-called roadshow to pitch its business to investors over the next several weeks, the Wall Street Journal reports.
The company is expected to start trading on the Nasdaq Stock Market under the ticker symbol "LYFT".
LYFT IPO to Test the Waters
The Lyft IPO will be testing the waters on how much investors value the industry and its main players such as Uber and other ride-sharing firms that have received huge startup money from private investors at high valuations.
According to people familiar with the offering, Lyft is widely expected to achieve a price in the public market that far exceeds its last private valuation of $15.1 billion as of early 2018.
In the filing, Lyft also highlighted its expanding market share in the U.S., which grew to 39% in December 2018, up from 22% in December 2016, pointing to growth from both new drivers and riders as well as increased ride frequency.
ETF investors who want exposure to the newly listed company may look to something like the IPO-themed Renaissance IPO ETF (IPO) . The Renaissance IPO ETF usually incorporates new issues within 90 days of listing and kicks out older ones after two years of public trading. The fund can also quickly include new sizable companies at their discretion.
"The ETF tracks the rules based Renaissance IPO Index, which adds sizeable new companies on a fast entry basis and the rest upon scheduled quarterly reviews. Companies that have been public for two years are removed at the next quarterly review," according to Renaissance Capital.
For more information on the tech sector, visit our technology category.
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