Portfolio Media. Inc. | 111 West 19th Street, 5th floor | New York, NY 10011 | www.law360.com Phone: +1 646 783 7100 | Fax: +1 646 783 7161 | customerservice@law360.com

Lyft's $2B IPO Dominates Week That Could See 4 Deals Price

By Tom Zanki

Law360 (March 22, 2019) -- Ride-hailing giant Lyft Inc.’s potential $2 billion initial public offering will highlight the IPO calendar for the final week of March, which could see four companies go public with the help of nine law firms.

Lyft Inc., represented by Wilson Sonsini Goodrich & Rosati PC, plans to offer 30.8 million shares priced between $62 and $68, raising $2 billion at midpoint in what would amount to the largest   IPO yet in 2019. Lyft would also mark the first major “unicorn” — a privately held company valued at more than $1 billion — to go public this year.

San Francisco-based Lyft is by far the largest deal in an otherwise modest lineup for the coming week that also includes two biotechnology firms and a blank check company that could raise an additional $300 million combined if their IPOs price as scheduled. A total of nine firms are advising the coming week’s offerings, when counting representation of issuers and underwriters.

Lyft is being watched closely because it could set the tone for what is expected to be a banner    year for large IPOs, given the number of high-profile companies waiting in the wings. Lyft’s rival Uber,  plus workplace messaging app Slack, have reportedly confidentially filed plans with  regulators and expect to go public this spring. Image-search company Pinterest Inc. also publicly filed IPO plans on Friday, aiming for an April listing.

Venture-backed Lyft hopes to score a big boost in value by going public during a bullish period for stocks. The No. 2 ride-hailing company behind Uber was most recently valued at $11.5 billion, according to venture capital database CB Insights Corp. Lyft’s value could rise to $20 billion, depending on how the IPO prices, based on the company’s number of outstanding shares.

“People in the pipeline are going to want to see how successful they were at getting a meaningful premium compared to their private company valuation,” Haynes and Boone LLP partner Greg Kramer said.

Demand for Lyft’s IPO is already oversubscribed, according to reports. The deal is expected to price Thursday while Lyft’s shares begin trading Friday, according to a Nasdaq calendar.

Mark Zyla, a managing director of Atlanta-based valuation and litigation consultancy firm Acuitas Inc., said financial metrics from Lyft’s IPO will likely be used as a benchmark to determine pricing for other large technology companies planning to going public, particularly Uber.

“There will be a lot of interest in how Lyft performs,” Zyla said.

Lyft is going public amid soaring growth coupled with sizable losses. The company reported doubling its revenue to $2.2 billion in 2018, but its annual loss also rose to $911 million amid rising expenses. Lyft warned that its expenses could further increase as it hires more sales and marketing personnel in order to enter into new markets, according to its registration statement filed with the U.S. Securities and Exchange Commission.

Lyft is also touting itself as strictly a transportation service provider, possibly distinguishing itself from Uber, which also owns other lines of business like food-delivery services.

“Lyft is focusing on what it does well and making it easier for investors to understand their business,” said Alex Castelli, a partner at accounting firm CohnReznick LLP and co-leader of its national liquidity and capital formation advisory group.

Shareholders will have limited say in how Lyft grows its business. The company is going public with a dual-class stock structure that reserves separate shares for co-founders Logan Green and John Zimmer, who will each own 20 votes per share while the public buy one-vote shares. The setup assures that Green and Zimmer will control about half the company’s voting power.

Dual-class advocates say the structure, widely used among technology companies, protects the ability of founders to pursue their long-term vision in the face of short-term market pressures.

But critics, including large shareholder groups like the Council of Institutional Investors, argue that such structures insulate executives from accountability. Lyft declined to comment.

Two biotechnology firms are also scheduled to go public this week, according to a Nasdaq calendar.

French drug developer Genfit SA, who is represented by two law firms, expects to raise about

$132 million to help fund therapies treating potentially deadly forms of liver disease.

Loos-based Genfit, advised by Cooley LLP on U.S. legal matters and Linklaters LLP on French law, told regulators it plans to offer 5 million shares at $26.33 each, equal to the €23.42 price at which its shares recently traded on Euronext Paris. Genfit plans to list U.S. shares on the Nasdaq.

Genfit told regulators that IPO proceeds, along with funds raised by a concurrent private placement with European investors, will support its most advanced drug candidate, elafibranor, which is being developed to treat certain liver diseases.

North Carolina-based Precision BioSciences Inc. plans to offer 7.9 million shares priced between

$15 and $17 apiece, raising about $126 million if shares price at midpoint, represented by Smith Anderson Blount Dorsett Mitchell & Jernigan LLP and Latham & Watkins LLP.

Precision BioSciences said in a regulatory filing it is developing product candidates aimed at treating disease and creating sustainable food and agriculture through its gene editing platform.

One blank check company, which is a shell entity that raises money to pursue acquisitions, rounds out the queue.

Singapore-based 8i Enterprises Acquisition Corp., represented by Loeb & Loeb LLP, plans to raise

$50 million by offering 5 million units at $10 each. The company told regulators it plans to search for an acquisition target in Asia, though it is not focusing on a particular industry. It was also    listed on last week’s IPO calendar but hasn’t priced yet.

J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Jefferies LLC, UBS Securities LLC, Stifel, Nicolaus & Co. Inc., RBC Capital Markets LLC and KeyBanc Capital Markets Inc. are lead underwriters for Lyft’s IPO.

Goodwin Procter LLP is representing Lyft’s underwriters.

JPMorgan, Goldman Sachs & Co. LLC, Jefferies and Barclays Capital Inc. are lead underwriters for Precision Biosciences’ offering. The underwriters are represented by Cooley.

Goodwin Procter is advising Genfit’s underwriters on U.S. legal matters while Jones Day is advising Genfit’s underwriters on French law.

Chardan Capital Markets LLC is underwriting the 8i Acquisition Corp. IPO, represented by Scarinci  & Hollenbeck LLC.

--Editing by Kelly Duncan and Alanna Weissman.