JPMorgan Chase & Co is to take on the profitable job of overseeing Lyft Inc’s stock in the early hours of trading after the ride-hailing company goes public, people familiar with the matter said.
JPMorgan was one of three lead underwriters for an initial public offering (IPO) named in Lyft’s filing on Friday, alongside Credit Suisse Group AG and Jefferies Financial Group Inc.
Altogether, 29 banks were listed as participating in the offering.
The IPO stabilization agent, also known as syndicate trading manager, oversees the first-price setting and manages additional shares allotted to underwriters in a so-called greenshoe option.
It is a coveted role for banks because it also comes with the potential for more commissions on trades.
Lyft would not disclose proposed terms for its IPO, including whether it will include a greenshoe option, until a later filing.
Representatives for Lyft and JPMorgan declined to comment.
With its filing on Friday to the US Securities and Exchange Commission, Lyft pulled out in front of larger rival Uber Technologies Inc, which has filed confidentially for an IPO and is expected to follow Lyft in going public this year.
Uber has lined up Morgan Stanley to lead its IPO and Goldman Sachs Group Inc is expected to play a role, people familiar with the matter have said.
Lyft is targeting a public valuation of US$20 billion to US$25 billion for its offering based on its fast-pace growth and despite mounting losses, a person familiar with the matter has said.
Its listing will likely be eclipsed by Uber’s.
Bankers seeking to handle Uber’s offering told the company it could be valued at as much as US$120 billion, people familiar with the matter have said.
Lyft’s public roadshow in which underwriters pitch the IPO to potential investors is expected to begin the week of Monday next week, a person familiar with the matter has said.
While Lyft’s revenue doubled to US$2.2 billion last year from 2017, it lost US$991 million, according to its filing. Its losses would be among the largest-ever for a first-time public company.
One looming question is whether Fidelity Investments Inc, which owns a 7.7 percent stake in Lyft, intends to buy, sell or hold shares in the IPO.
In its prospectus on Friday, Lyft’s founders pitched investors on a company that would “redesign our cities around people, not cars.”
That is despite running a business that generates almost all of its revenue through car-based ride-hailing.
Lyft’s two founders are together expected to take near-majority voting control of the company’s shares as part of the IPO.
The company plans to introduce a sunset provision so that voting power will eventually expire, said one of the people familiar with JPMorgan’s role, all of whom asked not to be identified because the matter was not public.
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