Many companies have been railroaded by the banks to price their IPO shares so conservatively that they make relatively little money on the IPO. It may be dwarfed by the amount the banks and investors make in a few days.
Taking the long term view, maybe this IPO is just fine. The company gets funds, they grow their business and the stock will rise well over time.
IPOs traditionally had four purposes:
(1) Introduce a company's securities to public-market investors;
(2) Price said securities;
(3) Let existing investors sell; and
(4) Raise money for the company.
> Taking the long term view, maybe this IPO is just fine
Analysts overstate the importance of IPO dynamics. Facebook had a terrible IPO and. Snap had a great first day [1]. That said, burning an entire class of investors (retail) on day one, particularly for a brand like Lyft, isn't a great show. It's also reasonable to call out the bookrunner, JPMorgan, as a bad choice for future IPOs.
[1] https://www.cnbc.com/2017/03/02/snapchat-snap-open-trading-p...