San Francisco: Lyft Inc. was sued by investors who claim the ride-sharing company overstated its market position when it went public last month, leading to a dramatic plunge in its stock price. Two separate class-action complaints against Lyft, as well as its officers and directors and underwriters, were filed in a US court in the company’s hometown, San Francisco.
Since going public on March 28, Lyft has declined 17 per cent to $59.51 (Dh219). That compares with the offering price of $72. The stock sold off sharply amid larger rival Uber Technologies Inc.’s filing for an initial public offering last week, as investors will soon have another option to bet on the potential of ride-sharing and gig-economy.
The investors claim Lyft was exaggerating in its prospectus when it said its US market share was 39 per cent. In both suits, the plaintiffs also dinged the company for failing to tell investors that it was about to recall more than a 1,000 of the bikes in its ride-share programme.