The biggest winners of the Lyft IPO – Quartz

Lyft may not earn money, but its investors and managers certainly are.

The shares of Lyft Inc. gained 8.7% on their very first day of trading (March 29), closing at $ 78.29 after a price of $ 72 in the initial public offering. The gain augurs well for Lyft; The company had already increased its IPO price range earlier in the week due to investor demand. It is also one of the first indications that the market is hungry for consumer-centric technologies in a year in which many such companies have indicated their intention to become public.

One of the main questions of any IPO is to get rich. In the case of Lyft, the company's five largest investors completed the first day of trading with shares worth over $ 1 billion – unicorns in their own right.

The Japanese internet and electronics company Rakuten, Lyft's largest shareholder, ended the day with $ 2.46 billion of clbad A common shares. General Motors and Fidelity followed with shares of $ 1.46 billion and $ 1.45 billion, respectively. The equity stake in Alphabet Lyft was only $ 924 million at the IPO price of $ 72, but the gain on the first day raised it to $ 1 billion.

Lyft's IPO has also generated many in-house millionaires, including co-founder and CEO Logan Green, co-founder and president John Zimmer, and a few members of the company's board of directors.

Green and Zimmer each hold an equal number of Clbad A common shares, but Green has about 2.6 million additional units of Clbad B common shares, which gives it greater value and also gives him a disproportionate control over the company. Clbad A common shares come with one vote per share, while Clbad B shares carry 20 votes per share. Lyft has only sold Clbad A shares as part of its public offering.

This type of two-clbad stock structure has become increasingly popular with technology companies over the last decade as founders seek to retain control of their companies after making them public.

The value of these holdings could still change substantially before their holders can cash in. Lyft's principals and major shareholders have entered into a customary lock-up period preventing them from selling their shares for 180 days from the date of registration of the company's filing (March 28).

Many can arrive in 180 days. Blue Apron, a company specializing in meal kits, went public in June 2017 at $ 10 a share. By the time most of the lock-in period before the IPO expired, the company's share price had fallen by nearly 60% to $ 4.03.