OK, OK, so that last part doesn't have anything to do with a nation full of office-workers gathering around their computer screens to watch teenagers run and jump and throw a ball through a hoop. But this year, at least, the IPO mania is just as real as the March Madness. Here are nine things you need to know from the past week, beginning with a pair of billion-dollar IPOs from Bay Area businesses founded nearly 160 years apart:
1. The IPOs by the BayAs winter turned to spring and the stock market continued bulling its way to loftier and loftier heights, a company from San Francisco planned a much-anticipated move onto the public markets at a valuation of several billion dollars. Investors flocked to the listing, even with a dual-class share structure that meant post-IPO power would be consolidated in the hands of its prior owners. And that demand drove up the price, as the usual smart money banked on smaller investors—eager to own a piece of a consumer company that fosters a strong connection with its customers—also seeking a slice of the action.
We're talking, of course, about Lyft. We're also talking, of course, about Levi Strauss.
It's pink mustaches versus blue jeans. It's a company created in the wake of the financial crisis versus one founded several years before the Civil War. It's the promise of far-away future profits versus the guarantee of hundreds of millions coming in every year. It's Lyft versus Levi's, a pair of IPOs that would look oh-so-similar if only the two companies involved weren't so utterly different.
On Monday, Lyft announced a price range of $62 to $68 per share for its upcoming listing on the NASDAQ, reportedly setting the ridehailing company up for a $23 billion valuation if all went as planned. Well, it went better than planned—by midweek, with Lyft's roadshow barely underway, reports had emerged that the listing was already oversubscribed, meaning that $23 billion figure could climb even higher.
On Thursday, meanwhile, Levi's went public on the NYSE, returning to the public markets more than 30 years after the descendants of Levi Strauss himself took the apparel company private for a reported $1 billion in 1985. After initially anticipating a price range of $14 to $16, Levi's eventually priced at $17, with the Strauss family selling off shares worth hundreds of millions in the process; the stock closed Thursday trading at $22.41, completing a 32% first-day bump.
Lyft will likely shoot for something similar—which, if it succeeds, will not be because of similar pre-IPO financials. You'd probably expect as much for a company that's had 16 fewer decades to establish itself. For its most recent fiscal year, Levi's logged net income of $285 million. Lyft, meanwhile, registered an annual loss of $921 million—a difference between the two of about $1.2 billion.