Uber, Lyft Expected to Lead Mega-IPO Stream in 2019

Uber, Lyft Expected to Lead Mega-IPO Stream This Year

Initial public offerings (IPOs) just had their busiest year since 2014, opening the door to some massive deals in coming months.

Ride-sharing giant Uber and smaller rival Lyft are expected to lead the charge. Press reports in mid-October said Uber was targeting a valuation of as much as $120 billion, although that may have changed following the broader market’s drop since then. Morgan Stanley and Goldman Sachs are the likely underwriters.

Lyft hired J.P. Morgan around the same time, with a discussed capitalization around $15 billion. Timing for their deals isn’t clear, but insiders expect them to race each other to market.

Both companies are among a series of “decacorns,” so-called because they’d be valued at more than $10 billion. Not surprisingly, technology names dominate the list. Many are well-known firms in niches like e-commerce and fintech (financial technology).

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Just take peer-to-peer lodging service Airbnb, which fetched a $31 billion price tag in a 2017 private funding round. It doesn’t seem to have hired any bankers yet, and apparently may use a non-traditional “direct offering” like Spotify (SPOT) last April.

The other two best-known companies are probably social-media platform Pinterest and discount brokerage Robinhood. Pinterest was valued at $13-15 billion last summer while Robinhood has seen estimates for about half that amount.

Other names on the list are less consumer-oriented and more business focused. Palantir Technologies is a data-intelligence firm co-founded by Peter Thiel, who also launched PayPal (PYPL). Its valuation is estimated at $30-40 billion.

WeWork, a provider of shared office space, is on the list for a similar price. Messaging and collaboration firm Slack has already hired Goldman Sachs and is also expected to go public for as much as $10 billion.

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David Russell is Global Head of Market Strategy at TradeStation. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.