Shares of Lyft (LYFT) are on the rise on Monday as the lock-up period following its initial offering ends, which was earlier than expected. According to a filing, the company said it estimated that approximately 257.6M shares of Class A common stock would become eligible for sale.
LOCK-UP PERIOD ENDS: On August 8, Lyft disclosed that the lock-up period following its IPO back in March would end on August 19, earlier than the expected September 24. In a regulatory filing, the company said that pursuant to the lock-up agreements with the underwriters, if at least 120 days have elapsed since March 28, 2019, the company has publicly released earnings results for the quarterly period during which the IPO occurred and such lock-up period is scheduled to end during or within five trading days prior to a broadly applicable and regularly scheduled period during which trading in the company's securities would not be permitted under its insider trading policy, such lock-up period will end ten trading days prior to the commencement of such blackout period. Its lock-up period is scheduled to end on September 24, 2019, which falls within the company's quarterly blackout period that commences at the end of the day on August 31, 2019. Therefore, in accordance with the lock-up agreements with the underwriters, the lock-up period will end at the open of trading on August 19, 2019, which is ten trading days prior to the commencement of the company's quarterly blackout period. The company will also release the market standoff agreements when the lock-up period expires. The company estimates that approximately 257.6M shares of Class A common stock - including approximately 12.8M shares of Class B common stock convertible into Class A common stock - may become eligible for sale.
Commenting on the company's lock-up announcement, JPMorgan analyst Doug Anmuth noted that Lyft indicated that co-founders Logan Green and John Zimmer, along with CFO Brian Roberts, who collectively own about 5%-6% of shares, will not be selling at the lock-up expiration. Certain shareholders deemed affiliates will also likely be subject to Rule 144 volume restrictions, including large shareholders such as Rakuten, Andreessen Horowitz, and Alphabet (GOOG), all of which have Board presence, he added. Anmuth has an Overweight rating on the shares.
PRICE ACTION: In morning trading, shares of Lyft have gained about 1% to $52.96.