In less than seven weeks since it went public, Lyft Inc has seen a stumble in its stocks with discourage shareholders breathing on their necks with a lawsuit over claims they were taken for a ride.
In comparison was Snap Inc which laster a little more – about 10 weeks before lawsuits started creeping in.
With these lawsuits, trials are rare as most often times it is settled out of court. The usual claim is always that company founders, officials do overhype the prospect resulting in losses for investors when the truth is discovered as stock losses its value.
It became obvious in one or both of the lawsuit filed four days ago, the company failed to disclose that it was about to recall more than a 1,000 of the bikes in its ride-share program. No one in Lyft cab sharing camp has commented on the lawsuits.
Since the company’s IPO, its stock has declined 19 per cent of the offering price of $72. The stock sold off sharply amid larger rival Uber Technologies Inc.’s filing for an initial public offering April 11, as investors will soon have another option to bet on the potential of ride-sharing service company.
Experts say that while the first Lyft lawsuits were on the quick side, some companies have been sued even sooner after their IPOs. When Facebook Inc. went public in seven years ago and plunged 19 percent over two days after raising $16 billion in the IPO, it was hit within less than a week by a class action on behalf of investors who lost more than $2.5 billion.