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Photo: Smith Collection/Gado/Getty Images

Lyft last night raised around $2.34 billion in its IPO, selling more shares than expected and pricing at the top of its upwardly-revised range, sparking all sorts of concerns that we're at a market peak.

The big picture: It's entirely possible that we're at or near the top, and that it's all downhill from here. But we don't actually know, and certainly shouldn't extrapolate from the rush of unicorn tech companies going public.

  • The best of the past six years for VC-backed IPOs was 2012, in terms of offering proceeds, and that clearly wasn't a top.
  • If venture capitalists and crossover investors know this is a top, why are they still investing tons of cash into high-priced, growth-stage private companies?
  • If unicorn companies know this is a top, then shouldn't they have gone public last year, given the lockup restrictions (yes, this goes for VCs too).
  • If banks know this is a top, then their wealth management arms are committing malpractice by pushing high-net-worth clients into these IPOs.

Some more thoughts on Lyft's IPO:

  • This is the first $1 billion+ IPO on a U.S. exchange without Goldman Sachs or Morgan Stanley as an underwriter since JD.com went public in May 2014, per Renaissance Capital. The last U.S.-based issue was VMware back in August 2007, when Lehman Brothers was on the book.
    • Renaissance Capital's Matthew Kennedy emails: "Some obvious parallels with JD going public a few months ahead of its much larger rival (both GS & MS were part of the lead syndicate for Alibaba)."
  • Lyft reserved up to 5% of the offered shares for a program whose beneficiaries would include "drivers in good standing who have completed at least 10,000 rides on our platform." Such drivers could buy at the $72 per share price, but Lyft won't say how many drivers were eligible and/or participated.
  • Lyft and Uber are very different companies, particularly in terms of product and geographic focus. But Uber will, at least in part, be valued by investors on the revenue multiples set by Lyft.
  • The two big risk factors, from my perspective, are autonomous vehicles and labor regulation.
    • AVs could obviously help Lyft increase its margins and drive down its prices, but it also would open the ride-hail market up well beyond its current duopoly. Suddenly, it and Uber would be competing both with software giants (Google, etc.) and automakers (GM, etc.).
    • Lyft rang the Nasdaq bell in Los Angeles, where drivers have been protesting fee cuts. The more gig economy workers there are, the more national pressure there will be to guarantee them some sort of minimum wage (whether contract workers or not). These business models go further into the upside down if, for example, active drivers get $15 per hour (whether with passengers or not).
  • Both the market cap and fully-diluted valuations are way above the $15.1 billion Lyft last received from private market investors.
    • That's a big data point for growth equity investors who have insisted that private valuations are rational. If Lyft holds its price through the lockup period and other unicorn IPOs follow a similar path, then a lot of price critics from the past five years (sheepishly raises hand) will have to eat crow.

Go deeper: Investor FOMO is driving Lyft's valuation sky high

Go deeper

CDC: Fully vaccinated people can gather indoors without masks

Photo: Filip Filipovic/Getty Images

People who have been fully vaccinated against COVID-19 can take fewer precautions in certain situations, including socializing indoors without masks when in the company of low-risk or other vaccinated individuals, according to guidance from the Centers for Disease Control and Prevention released Monday.

Why it matters: The report cites early evidence that suggests vaccinated people are less likely to have asymptomatic infection, and are potentially less likely to transmit the virus to other people. At the time of its publication, the CDC said the guidance would apply to about 10% of Americans.

Dan Primack, author of Pro Rata
50 mins ago - Economy & Business

Ripple CEO calls for clearer crypto regulations following SEC lawsuit

Illustration: Sarah Grillo/Axios

Ripple CEO Brad Garlinghouse tells "Axios on HBO" that if his company loses a lawsuit brought by the SEC, it would put the U.S. cryptocurrency industry at a competitive disadvantage.

Why it matters: Garlinghouse's comments may seem self-serving, but his call for clearer crypto rules is consistent with longstanding entreaties from other industry players.

Republican Sen. Roy Blunt will not seek re-election in 2022

Photo: Alex Wong/Getty Images

Sen. Roy Blunt (R-Mo.), widely seen as a member of the Republican establishment in Congress, will not run for re-election in 2022, he announced on Twitter Monday.

Why it matters: The 71-year-old senator is the No. 4-ranking Republican in the Senate, and the fifth GOP senator to announce he will not run for re-election in 2022 as the party faces questions about its post-Trump future.