SINGAPORE (Apr 22): Investors who found some way to short the stock of Lyft, the No 2 ride-hailing player in the US, have had a great ride since its IPO three weeks ago. Lyft’s stock plunged to US$56.11 on April 15, down 22% from its IPO price, or 35% below its first trading day highs.

There is a sense of déjà vu for tech investors. In May 2012, the much-anticipated IPO of social media giant Facebook opened at US$38, went up as much as US$43, only to fall below US$18 just four months ­later, or as much as 52% below its IPO price. Facebook at the time was a loss-making firm in search of a business model, much like the ride-hailing companies around the world today. 

Lyft’s poor debut as a listed company is seen as an indication that the public markets may be far less forgiving of Silicon Valley unicorns’ high valuations and non-existent profits than private investors have been so far. Indeed, Lyft’s precipitous slide in its initial weeks of trading is seen as an ­ominous sign for Uber, its larger global rival that is expected to list in early May.

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