>> or the value proposition isn't there. >> right, for longer trips that's a good question it is an enormous market, global market talk so often about this dd in china is the dominant provider there >> founders call expanding overseas a call option which is also a big question. they're largely local. jon, now we'll send it to you at the nasdaq to pick up the key questions as we await first trade. >> we will take it it is 8:00 a.m. at lyft headquarters in san francisco, 11:00 a.m. in times square and we are aweightiaiting lyft' opening trade. "squawk alley" is live ♪ ♪

welcome to a special edition of "squawk alley." i am jon fortt here at the nasdaq market site, overlooking times square morgan brennan and melissa lee with me. carl has the morning off we are awaiting opening trade in lyft which could happen any minute >> as weawait that, it is a highly anticipated wave of unicorn ipos lifting off this morning, pun intended, with ride hailing service lyft above the initial range of $72 a share, valuing the company more than $20 billion full team coverage and analysis for you as we await that opening trade. seema mody tracking the action at the nasdaq. deirdre bosa, and we are going

to begin with seema mody as we close in on opening trade. >> morgan, the market is open about an hour and a half awaiting lyft to open. we are getting an indication from jay heller, the chief ipo tell us, 88 >> i mean, right now the book, settling into a range of 85 to 90 it is still very early 2.9 million shares we will keep building, take our time this will not be a sprint. >> 85 to $90 that's the indicative range at this point only 6 million shares have priced talking about 35.2 million shares have to be priced this is certainly a large ipo, therefore it takes time to get those shares onto the market and align the buy and sell orders. this is an ipo that generated a lot of attention that was evident during the road show, new york, boston, san francisco, within two days, the ipo was oversubscribed this week we saw lyft raise the price range, 62 to 68 to 70 to

72, and yesterday pricing at $72. i believe 85 to 90 would mean a 20% pop. the key to success is not just getting that pop, morgan, it is maintaining that level of gains not just today but for the coming months and during the lockup period and earnings reports. this is certainly trying to play the long game for lyft indications, 85 to 90 is what we're hearing. back to you. >> i will take it. we'll get back to you in a bit joining us with more at the nasdaq, managing director dennis berman and henry blodget good morning dennis, which of the issues around lyft should investors think about the most talking about governance, talking about competition, talking about valuation. there's potential regulatory issues what's the focus >> the dual class issue, lots of relevant an important discussion

about that, jon. but let's be real. if you don't want to buy the stock because of that, and that's a fair reason, do not buy the stock. >> uber doesn't have the same issue and they're bigger. >> you may wait for uber that's on the governance side. on the operational side, one thing that caught my eye this morning, what do you think the property and equipment is of lyft, $121 million what do you think the ppa is of ford motor company, $68 billion. there are lots of questions you can have about pricing, marketing spent, everything going into keeping profits down. when you look at the leverage of a business like lyft versus physical molecules business like ford, you see something that's i think largely about the future. >> asset light model that's attractive. >> don't own the car, the drivers. those to me from investment standpoint are positives.

>> for many businesses, one of the biggest costs is labor same is true for lyft, it is what they pay drivers and marketing expenses investors seem to be bifurcating it into a short term story in terms of mass amounts of money they're losing versus the longer term story, the autonomous story, which people want to believe in, if you can buy lyft, put it in a drawer for five years, maybe this is for you. >> if anybody is based on autonomous, i would say rethink it it is so far out what drives the stock the next couple years is quarterly performance, can they sustain this growth rate, make it so losses continue to narrow. if they can and the stock doesn't trade up instantly to 90 or 100, i think you can see why big institutions are getting into it around the ipo price back to jon's question, the big issue is valuation, how much it is worth people have been wrong about these companies from day one so many people saying uber is such a stupid idea, valuation is

ridiculous, lyft can't make it work, it is a network game there's only going to be one all those folks entirely wrong all the metrics with the exception of the bottom line are great, they're improving on all of them. but at $88 if that's where it opens, this is a stock that's trading about ten times this year's revenue with a margin structure nothing like facebook or microsoft or a lot of other tech companies probably 50% gross margin at best you have to worry about that multiple. >> which dennis, that begs the question, what's the profitability for lyft, how much does that hinge on autonomous vehicles, and the fact they bet on a model different from their chief rival also going public. >> henry has a good point. now that you're a public company, you're measured by that quarterly performance. as you are measured, you have a lever to pull and market expectation different than before growth will matter immensely,

but you move more towards airline pricing model. isn't it ironic when delta drops a fare, united drops a fair. i see that unspoken market dynamic where prices come up over time and margins will probably improve over time too that seems to be the natural path. >> the flip side of the asset like advantage is the lack of moat the same language was used around amazon versus ebay when they went public ebay has the perfect model they don't have to touch the stuff. people ship it themselves. amazon spending all of the money on warehouses, isn't that awful, turned out it wasn't that awful. how important is it that assets are light, how closely should investors look for differentiation that provides a path to leverage down the line. >> having everybody know lyft, they talked in the prospectus

about how more and more down loads are from organic people that hear about it and want to use it technology is complex, you have to be big, huge economies of sail, both uber and lyft are getting into scooters and bikes and it is hard to manage all of that i actually think there's a real asset being built here i think the other thing people miss on losses, this is the story with uber all along in private markets, these companies continue to have mature markets where they have been forever and the story with uber a few years ago, those markets are wildly profitable, then they continue to roll out new markets where they lose a ton of money my guess is lyft doesn't disclose this, my guess is losses are coming from markets that are new, losing a lot of money, and core markets are probably profitable. ultimately that's how they get to profitability >> i mean, should we look at amazon and say we didn't know

what the path of profitability was, but if you invested in the ipo you would be happy today there's a difference looking at the company on profitability versus return on stock investment. >> i think that's a great point that today the fact they're losing a lot of money is actually not necessarily relevant to ultimately whether they will make a lot of money. but it is relevant to valuation. you have to have a story in your mind that says if they get to 5, 7, 10 billion in revenue, how much profit are they going to drive. ultimately this stock like all stocks, including tesla and other stocks are valued on cash flow, period the multiple will compress a lot. if you can't tell yourself a story how they get to that, ultimately you're exposing yourself to getting clobbered on valuation. >> they told the story when andrew ross sore kin talked to the founders, the way you look at it long term, you go to lyft, we'll show you how to get any

place using any transportation possible when i hear that story and narrative as the path to profitability, i think i do that with google today. i open up google maps, it tells me how to get there by public transportation, by ride share, by car i mean, to jon's point about barriers to entry, i feel like we look at lyft and uber very narrowly in terms of competition, but really it is much broader. >> i think that's fair and the apple news announcements earlier this week, voilà, they were deep, deep in the service business as well that's a fair point. if you would argue the affirmative, does the world look like a ridesharing world or less like a ridesharing world destruction of the rental car business market caps, destruction of the cab business in new york city shows that. >> i think the point for me

where the governance comes in is on the value of the company as a potential acquisition target even if uber can't buy it because of antitrust, maybe google or apple can. but are the founders going to want to sell and do you have to think about the valuation with that kind of calculation suppose somebody wants to take this company over and don't want to sell. >> the market is pretty efficient. my guess is to dennis' earlier point, there's some discount that reflects the fact that the company is controlled by founders the other thing i would say is a lot of corporate governance and control is about controlling public perception of everything. if this stock goes in the tank and people think the company is being run badly, there will be intense pressure on the founders yes, they don't have the legal way of getting rid of them, but the pressure will be intense there are other things shareholders can do. i think there should be a

discount, but ultimately i don't see why we can't have companies in the public market that have both structures. >> early price indication, $86 at this point. a long way to go before the stock opens, still in that range, 85 to $90 a share >> dennis, real short term question for you, but i think it is a key one probably a lot of people sitting on couches at home watching this, seeing us do a special hour around the lyft ipo, wondering do i buy today or do i wait >> i knew you were going to ask that question. i am not a stock picker on a day-to-day basis here are things i would judge if i were making that choice if i were at home one, can i stay in it, do i believe in the long term vision of the country, can i stomach the governance issues. and four, a duopoly to sustain itself in a way margins become

better that's what i would ask if i was sitting on my couch. >> what if you want in on the space and you're trying to determine lyft or uber what's the calculation that bro brings you to lyft >> i think from an overall standpoint you have issues and safety issues, they've done a pretty good job, a cleaner story in that regard you have a little more scrappier u.s. focused company uber sold off a number of markets, particularly in china this is a bit on the u.s. than the other markets. >> all right good insight henry, thanks for being with us. dennis, stay with us as we await first trade of the lyft ipo. let's get back to los angeles. andr andrew ross sorkin spoke with both lyft co-founders. hey, andrew. >> reporter: i was listening to

the conversation you were having and not only is the control issue and governance issue something that investors are thinking about, the other, and i put it to them, was a question about the lock up and what happens to their own shares. we talked about that they'll own 49% of the company collectively in terms of voting power, only 5% economically. when i asked them specifically about this, and becky quick was in on this as well, this is what they had to say. >> to be honest, we haven't thought too much about that. we're really focused on the long term execution we believe long term in the value we can create and genuinely are focused on our mission, to improve people's lives with the world's best transportation >> reporter: i will say today, i have been on the phone, you know, not only are people looking at lyft and there are lots of people all over from lyft here, but really i think

the reason we're spending as much time on this as we are is that every other unicorn is looking at this to see what excitement there is and how much the market will bear uber is next in line, and pinterest and slack and so many others looking at the price at $86 as indicated bid i think will be a lot to look at and see how much the market can bear. where the line is, that's a conversation we had earlier, there will be so many ipos coming public. and one last piece, and it is the issue that dennis mentioned in terms of order of events, it's interesting in a very odd way, i imagine uber is happy to be going second, and because in large part because lyft is the pure play and they're going straight after the transportation issue

uber is involved in other things, uber eats is a big component of the business and other services they want to layer on top will make it more complicated for investors to ultimately value as you guys talked about, we are sitting at home, thinking about what to invest in, whether you want to, one thing to think about, no matter how you slice it, we're still a speculative bet. i don't think anyone out there will say -- nobody is looking at this as a value play maybe ten years from now you'll look back and go maybe it was a value play. >> all that said, hard to believe they haven't thought at all about what happens after the lock up. look at pinterest and the way they structured their governance they clearly thought about it even in the way it was structured so i don't know. not sure i bought that >> you know, i would have thought they thought about that as well. i will try to take them at their

word that they haven't obviously when and if the lock up goes off, a lot of people will be watching to see whether they sell any shares, try to get indication of what that means. >> meantime, we're waiting for the first price. andrew, thanks for joining us. great interview. andrew ross sorkin don't go anywhere. we're counting off to the lyft-off here at the nasdaq markets. coming up, interview with geoff lewis. this special edition of "squawk alley" is back after this. ♪ to inspire confidence through style. ♪ i'm working to make connections of a different kind. ♪ i'm working for beauty that begins with nature. ♪ to treat every car like i treat mine. ♪ at adp we're designing a better way to work,

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with every minute, itseems like we're getting a tighter indication range 85 to 87 now on lyft the indicative price, 86 bucks a share. we're awaiting the final price and initial trade on lyft. that could happen in minutes or as much as an hour or two. another setback for british prime minister theresa may they rejected her proposed brexit deal a third time the uk has until april 12th to come up with an alternate plan they voted on a range of ideas, none managed to gain approval. lyft is going public today just doesn't have an effect only

on investors phil lebeau joinsus with more on what it means for the whole auto industry and one of lyft's largest investors, gm. phil >> yeah, this investment turned out well for general motors. talk about that in a second, jon. this question of whether or not lyft and uber and other ride share companies to come in the future will gut auto sales hasn't been borne out by data we have seen since lyft and uber started to offer rides and became well known around the country and in the world we are in the best four year stretch for new vehicle sales in the united states. if you think people are stopping buying new vehicles because they're ridesharing, some may be doing that, but many are not people going to show rooms, used sales were record high of 40 million vehicles, that's the estimate for that many last year, and vehicle ownership per person in the u.s. is increasing it is near the record highs we saw back before the recession in

2008 the bottom line, are there people ditching vehicle ownership because they're doing ridesharing, you bet are we going to see wholesale, nobody going out, buying a vehicle and going to see huge drop off in new and used vehicle sales, that's not borne out by data as you look at shares of general motors, gm has a subsidiary cruz in san francisco that plans to launch the autonomous ride share service later this year. i think that's what you'll see more and more automakers do, try to take vehicles, combine with the technology for ride shares, and autonomous ride shares, that's the area you'll see the most investment. it is already there and will continue. >> phil, maybe we're not seeing the numbers play out in car ownership and auto sales per se yet. i would have expected to see more damage in terms of car rental companies hertz and avis are both higher, since start of the year, hertz up 28%, avis up 50%. i realize you see pain in stocks

over the last couple of years, but it is interesting to see the rally in spite of this >> well, that rally is bouncing off the pain these guys were beaten down, overly beaten down the last couple of years as people started questioning the business model for rental car companies there's no doubt, morgan, they lost business to ride share companies. that's borne out by those that look at process business transactions for business travelers, and also when you look at the taxi industry. that's the other area where lyft and uber have really cut into the business model there's no doubt, it is transformative technology in that regard. you will hear people, even people in the newsroom say i'm not buying a car, i don't have a second car, we use ride share. there are cases of that. widespread, you're just not seeing that. >> i'm trying. i'm in jersey. phil, i wonder, could we perhaps not see the real effect of lyft and uber on the auto market until we hit a real downturn

maybe when the economy is pretty good, people feel like yeah, what i do when the economy is good and got some money, i buy a car. maybe that calculus changes when the economy is not good. could that be the cause of any delayed effect we're seeing in new car and used car buying? >> perhaps a little bit, but i think what we're seeing, you're seeing a second -- not a second but another category of transportation for people like you and others who said i don't need a second car because i have a ride share company i can use but in terms of you look at california, i talked with some people in los angeles that said nobody is buying cars out in california and los angeles, they're using ride share really really look at california new car sales. they were close to a record high it is just not being borne out people are continuing to buy vehicles there are always going to be people that want their own vehicle as opposed to a ride share service. >> dennis, i look at lyft, you

hear autonomous as part of the lyft story and valuation to lyft story. you wonder, whatever the price is set today, would that imply that gm's cruz unit or tesla, that perhaps their valuation should come up or be adjusted according to the latest marker in the market? >> fair point. henry's view, it is going to be awhile i think it gets much more complicated if you try to value the autonomous part. you obviously have every car manufacturer doing their own thing. yes, there is a future there, but the cost now to make it work are high one point i will make is this. percentage of 16-year-olds with driver's licenses dropped precipitously in the last 30 years, particularly the last few years. phil may well be right on car buying, but interest in licensure to drive a car is down. >> talking about lyft and ridesharing today. to go to jon's point, many startups haven't weathered a

downturn or recession. is that something investors need to keep in mind too? >> it has been ten years of incredible equity growth in this country and for the world overall. i think that's a very fair point. right now though there aren't many stocks to buy 3800 stocks and that says it all. >> huge gap. all right. phil, thank you. phil lebeau. >> you bet. we are aweightiaiting lyft's trade. could end up being the biggest year for tech ipos joining us, cisco chairman john chambers, founder and ceo of jc 2 adventures great to have you on i want your thoughts on what as we see lyft today and other big names, so-called tech unicorns going public as expected throughout the year, what this could mean in terms of some of

that money freed up from early investors for startups do you expect we're going to see a direct impact between the two? >> no. i think it will be the reverse i think you saw $99 billion go into venture capital world in the u.s. startups since last year a recordsince 2000 i think when people begin to see the large investments where they invested $4.9 billion in lyft and see the return as $27 billion based on the stock today, if it prices in the range you e encouraged doing both. second part of the question is important one for the viewers, and i'll give you some data. i have seen every movie there is to see, upturns, down turns. let me walk through three examples the early stocks in a major technology model change are the ones that benefit. go back to cisco, i know the numbers well if you spent a thousand dollars on cisco in january of 1991, in the market, you would have made

156,000 over the next two decades. if you would have looked at google and facebook, as an example, next generation, ten years later of companies that really took off, and waited longer to go public, they would go at $23,000 return for google, for a thousand dollars invested in ipo, 4,000 for facebook the longer companies waiting to public, leverage goes out of it a little bit it doesn't mean lyft is not a good investment, i think it probably will be use cisco five years later, not 1991 but 1995. if you invested a thousand in 1991, you made 156,000 if you invested in 1995, you would have made 17,000 the longer they waiting to public, the less the returns but it looks good if you're early on in terms of key trends. >> you said you're inclined to think lyft is a good investment

even at the ipo. what's your calculation? >> early movers on new economy moves are ones that usually win. you saw it in the internet and social media, et cetera. but for the viewers, please don't bet on one stock even the best venture capitalists, they will tell you they don't know the companies that are going to be their stars. they know if they invest in 30, if they're good, two or three break away readers and listeners should do the same has to be a portfolio play picking a single stock is high risk in terms of opportunity getting early trends is key. you'll see 333 other unicorns coming to the market that's up from 80 five years ago. i think we're at the front end of job creation and opportunities. >> sorry to interrupt. we want to go to seema mody with the latest on when to expect the

opening trade. seema, getting close. >> reporter: we're getting close. the goal is to maintain a line of communication with jpmorgan, key syndicate and a number of brokers on the street to try to pair trends. 5.1 million paired shares, at $86, the indicative price lyft could open at. jeff thomas, head of west coast operations for nasdaq, help us understand where we're at in the process. >> jay is talking to jpmorgan and the rest of the street, letting them know the time line and how many shares we have, asking if they want to get involved, time to put in orders. >> about 5 million paired shares, that's good. >> usually see 10 to 15% of ipo volume in the opening cross. we had 32.5 million shares last night. 3 to 5 million range is what we expect, but looks like it is going higher >> $2.4 billion has been raised,

biggest ipo since facebook listed in 2012 how has the ipo process evolved? >> we work closely with banks to build out this technology, we put all of the data in terms of orders for buy and sell on their desktop, it is that technology let's them figure out the right price. >> it simplifies it. $86, 5.1 million shares paired >> i'm impatient is it like 15 minutes? >> nasdaq saying 10 to 15 minutes until we see lyft trade? >> we're getting close i think ultimately jpmorgan's call when we open the stock. that's what we're indicating to the street. >> it is a coordinated team effort nasdaq team and jpmorgan work together to get lyft to open for trade. >> we have been sitting near that $86 mark for quite awhile

85, 95 now in between 85 to 87 bucks a share that you mentioned of course we're going to continue to watch that as that gets prepared to open. dennis, highly anticipated, not just because of lyft itself, though this is a big ipo by ipo standards. but because we know lyft is coming, pinterest is coming, et cetera the price was $72 where it priced the fact that it is around 85 to 87, is that good how does that shake out? >> traditionally speaking as an underwriter, you want some pump in the stock, don't want it too high, you left money on the table from the company standpoint but reward those that step in as you build the books that's a reasonable price, most parties will be happy. i will say as an observation about interest in the ipos, this is a topic we brought up talking about levi's last week, there

aren't as many companies as there used to be we know numbers since 1995, number of listed companies dropped to 50% similarly, the stock buy backs have deequitized markets we work with companies trying to determine what the shareholders want but right now they haven't had many opportunities to buy new equities and therefore there's an opportunity for lyft and all these unicorns simply because companies are leaving the markets the last 20 years. >> first day pop is a foregone conclusion data from renaissance shows 97% of ipos are priced above their range went higher, average return on the first day was 42%. 42%. which is a signal to investors that unless you get in at the price, it is a difficult trade to make after the opening. >> to john chambers' point, there's been so much on them for

so long. when apple or cisco went public, they needed capital. these are more liquidity events than capital raising events. >> bring in mike santoli we talked about the rivalry between uber and lyft, there's a rivalry between the nasdaq and new york stock exchange as this tidal wave of ipos is expected to sort of happen this year. >> true. >> how should investors think of that as well >> investors don't have to think too much about where the stock islisted but i think it is goo to have two major exchanges effectively competing to create the best marketplace for the new stocks so i don't think necessarily you have to worry too much about it, except that both of them have a sort of distinct process in terms of how they open them, but

presumably this will work better than facebook did in 2012, and if that's the case, then i think everyone is okay with that, but it is good to have these two venues that are constantly out there, hoping to get the listings out there they're just going to do a better job ushering them into public markets. >> everybody tightened up their gain. >> there's a lot of elements of that one is facebook going for too high an initial valuation. >> back with us also, bring in andrew ross sorkin and geoff lewis. former lyft board member and early investor great to have you as part of the conversation as we get ready for this to open, geoff, what's the significance for this era of tech in -- tech innovation >> this is the first tech ipo in

quite some time that the public has been able to tangibly use in the real world, feel in the real world. lyft is such a well known brand, it's a product that a large portion of the population in the u.s. and canada uses that i think it ushers in a new era where there's a lot more tangability to technology and everyday life. >> you were literally, i think you were the first outside investor originally, when you were with peter teal with founders fund. what did you see that everybody else didn't. i remember a period it was supposed to be winner take all market, there are still people that think long term to make it a profitable enterprise, you can't have uber and lyft going at it on price. >> sure. answer the first question first. in 2012, i invested on behalf of founders fund and saw three things one was these founders are special. john and logan, even back then in 2012, these guys had a vision from day one of where they were

taking this company, and that's now i think still in the first or second inning of playing out. they want to re-invent transportation in cities that was evidenced by the product. they were doing peer to peer, regular people driving other regular people, opening up new work opportunities, new opportunities to earn money to regular people, breaking up taxi monopolies that was special back then >> and to the second question, idea of winner takes all, a lot of people look at the s1, it talks about how much discounting incentives, marketing, all of that spend, and you have it on the other end of uber doing the same thing, does it ever become rationalized >> i never thought it was winner takes all. at this point, is someone else going to raise 4 or $5 billion to do that, that's what it would take it is a two player market. >> do you see a path to profitability? >> you see decreasing marketing costs, increasing revenue per

rider, you see a very low churn rate on the rider side after three years, more than 85, 86% of riders are still active on the platform. key metrics are headed the right direction and they just scratched the surface in the united states in terms of market share. >> you think they ultimately get into international markets, china and other international markets are already starting to get crowded. >> yeah, the thing i loved about lyft was focus this came from john and logan. and i believe they're going to continue to focus in north america. i think in contrast to other players, not trying to do napoleonic con quests. i love the focus with the business. >> what happens to the business after today. you invest early, typically not in the public market do you stay in this stock? >> i don't want to give anyone trading advice, i am bullish on

the company long term, planning to be a shareholder in the business for some time >> in terms of economics, how much is focusing on the u.s. and your view of trends taking place with ridesharing versus them layering on other pieces of the business we don't know about meaning other services they don't want to get into the eating business like uber has, but to the extent there are other things layered on top? >> i don't like the laundry list layering strategy. i think the core ridesharing business, i believe in 15, 20 years, less than a quarter of the population of the united states will be owning cars i think ridesharing is the future of transportation in cities, and there's a very strong bullish story based on that >> final question. do you think it is an uber, lyft world or do you think it opens up to talk about autonomous vehicles and all of a sudden there's a new set of competitors. >> i don't know if we're ever

getting autonomous vehicles, for the record i don't know that we ever get them >> okay. calling that one early. >> no autonomous vehicles? wow, that's a curve ball thank you. andrew ross sorkin in los angeles with geoff lewis 5.7 million shares have been paired so far. we're getting close. mike santoli, i thought autonomous was part of the lyft valuation, the pie in the sky valuation. >> even the pie in the sky, the second act, where the business model has to transition to i don't know that anybody knows, not just for this company but for this category of disruptive technology, consumer facing, sharing economy type names, it has been a massive industry no public access to it. i think people build a portfolio of companies and say that's my call option on the future. see how it plays out. >> i think we're moments from the first trades let's get to seema mody for an

update >> five minutes away, melissa, that's what nasdaq is saying until we see lyft open for trade. here's the update. indicative price is 86.88. last night, lyft priced at $72 if it were to open at 86, 87, that would imply about a 20% pop. but again, the key is to maintain that level throughout the day. jay, quick update from you on where we're at >> we're starting to get closester. keep in mind, this is real time dynamic process. trying to have all voices heard, retail, institutional. if you want to participate in nasdaq's opening cross which is extremely transparent, working with a stabilization agent, get in now, we're getting close. >> where do you want to get before you close it? >> ideally that's up to jpmorgan they're the firm stabilizing we support them with information and data >> 86.95 thank you.

we'll get you the opening trade when it comes. >> thank you. dennis, same question to you. autonomous vehicles, they might never come. >> first of all, i don't know if i want ten people around my desk watching as i work quite an audience. that's a tough gig as far as autonomous, i think it is inevitable. whether it is 10, 15, 5 years from now, 100 years from now, are we going to have autonomous vehicles, absolutely >> by the way, just to your point, if newer than 20% of people own cars and we're not autonomous, how many people are driving other people around? >> doesn't it seem like you'll get autonomous buses before cars there's already a lane for the bus, it carries a lot of people. >> that's a regular route, too, important in autonomous. >> maybe investors should be thinking of that as the canary in the coal mine that tells us when autonomous starts to become real >> it is already real.

it will continue to be real. it is not entirely real yet. it's already trucks. it will be buses again, 10, 15 years. current car manufacturing process and companies today, even those companies are making tremendous investments on that. >> what's fascinating is this ipo is a test of the public market's appetite for this kind of conversation. how big is the addressable market, are we giving the benefit of the doubt, how long a leash do you give the company, how do they trade relative to long term opportunities. >> and that's a barometer for the risk appetite, where we are in terms of how far out are investors willing to go to bet on a company like lyft, losing money, fine, there's revenue growth what does it signal for the rest of the market. >> there's big cap tech that they love. faang stocks are automatic networks that print money

largely. these are different. two sides of the trade, driver and customer are subsidized, spend money now to get huge. it is a different equation >> although it is reminisce ento amazon. >> one monstrously successful example of many hundreds of companies that tried to be amazon. >> subsidizing on price to get the consumer, to gain market share. >> consumer behavior it is now expectation you as the consumer will get a package in two days or less, buying from amazon or any other retailer, they have conditioned behavior lyft and uber have conditioned behavior, i look at my phone, a car appears. that's not getting put backin the bottle. >> but that's also getting a ride at a certain price. isn't that part of it? you're conditioning the consumer to accept subsidized rides that may not exist infinitely, indefinitely. >> that's true are you going to stand in the rain and get a cab to spare 10%

on the elevated lyft price my guess will be no. >> and now we have indicative price of $87 a share we cross the threshold of 6 million paired shares. any moment now we could see lyft begin to trade at the nasdaq as we look ahead to that, mike santoli, renaissance ipo etf symbol is up more than 30% so far year to date how much does that play into the reception a stock like lyft is getting? >> it shows you that professional investors are very interested in growth, in earlier stage growth that's been the privilege type of stock working this year, we're not sure of broader economic situation now i think that feeds into it it's not the whole story i think growth managers -- >> by the way, if people at the

nasdaq are there, probably less than a minute away indicative price $87 a share one minute away i am told now. almost 6 million paired shares of lyft. the ipo pipeline expected to open up for 2019, it is expected to be a record year. 234 companies going public in 2019 for a record $700 billion in valuation very important marker for the 2019 ipo pipeline happening in moments from now we look at 87 bucks a share. >> and different exchanges do it different ways we see jay as a popular man with everybody around his desk, waiting to see how this will go. >> no pressure, jay. >> certainly the man you want to be around if you're trying to understand where lyft is going to open for trade. thankfully we at cnbc have exclusive access and a good look at where lyft will potentially trade. right now it says 87.05.

that's what i see as i look around his shoulder for shares of lyft. let's listen in on what jay is -- >> creeping up still seeing some modifications, buddy. give it a second, see if it filters back to 87 okay going to give myself a few pennies to the up side keep it light, keep it tight >> again, indicative price is $87.11 jay, what's the hold up? >> i'm waiting for the final word, working with the stabilization agent. it is imminent stand by we'll let you know >> we have been here all morning. it is important to know, markets opened at 9:30 a.m. eastern. 10:35 a.m. is when the coding process commenced. 10:45, shares were eligible to trade. but during that time with the ipo discovery process kicked off, it is a coordinated effort with the nasdaq capital markets

team, led by the ipo officer, jay heller as you can see and jpmorgan, which is the sinyndice manager. a number of other banks are involved it takes some time >> takes a bit longer than it takes a lyft to show up and take you someplace. indicative price, $87.20 more than 60 million paired shares now jpmorgan makes the call. jay does not even though everybody is gathered around, the stabilization agent makes the call did i hear 30 seconds away now >> we're getting very close, jay, another minute? he can't answer. that's what i'm getting. >> you may want to get out of range of jay >> give me a few pennies, i can do that. stand by, buddy.

you're opening 87.24 that's the opening price >> lyft is officially opened for trade on the nasdaq. you can see, the size and high profile nature makes it well watched by folks at the nasdaq but the syndicate manager, jpmorgan a number of investors, including general motors, a lot of venture capital names are in this name as well. today was a comprehensive process that for the most part worked well. trade began at 9:30 a.m. for u.s. markets 10:35 a.m. is when the quoting process kmenlsed, and 10:45 is when shares were eligible to trade. took time, here we are at 11:40, shares are trading around 87. >> trading $87 on the button, up about 20%.

>> interesting to see how it trades through the day opening trade is an exciting moment in the history of the company, interesting for us to watch as observers to get it priced and open for trade. but how it trades after, that's the key tell >> it is usually the tell. part of the point of the the pos prolonged process of trying to pair up a lot of this demand is to try to get something that looks like a price that will last for most of the day >> you hear the applause here at the nasdaq market as we are witnessing some of the first trades for lyft as a publicly traded companytake place it's a big moment for them this company, they built something out of nothing ipos, i think it's worth reflecting even just for a moment of the journey of these

companies and the people involved it is kind of special to be part of and see and appreciate. >> nasdaq different from the new york stock exchange allows companies to be anywhere the founders, ceo to be anywhere as the company goes public you have some people here and some in southern california. >> we're watching shares of lyft trade here what did you think of the proce process? >> we started at 10:35 we got up to six million shared pairs which is almost 20% of the book there's a healthy balance between institutional and retail and opened up at 8724, which is great. >> what is the market, about 20.6 >> that's right. we're open for trading along with all the other stocks on nasdaq sdp you say enough money was

left on the table for retail investors to participate >> the whole process is to make sure that everybody gets the opportunity to participate that's why jay communicates that with the whole street. we got everybody in and that's how we got to 6 million trade. >> jay is wrapping up this intense call what dwlo you make of it i >> it's a fantastic day across the board. you're seeing an atmosphere where institutional players with participate and holding a fantastic company like lyft. >> how do we ensure this ipo goes well now that it's open for trade? how do we avoid that from happening? >> we prides ourselves in our technology themarkets are efficient it's a fantastic day we're very confident in everything we do here. this is not about nasdaq congratulations. >> jay heller.

thank you. back to you. >> thank you as we hear the applause let's go back the los angeles with the scene there as lyft opens for trade. andr andrew >> i was just hearing applause when the stock opened. we're abou terms of valuation than the company was just several hours ago. there will be other who is say that's $5 billion left on the floor for the company. of course, this is a company that will have to spend a lot more money over the nec several years as it continues to build

we'll watch for that this has been kwiequite a produn today. it will be interesting to see what the other deca corns, as they are now being called, will do on their big opening day. back to you. >> it's worth noting for lyft as well as uber they are going public in a very different stage of their life cycle than previous companies that have seen this. lyft and uber alone have raised more venture capital than any other company that's gone public >> that he has are mature start ups. if you go back and think about the history of lyft, it inhibited in 2012 to become lyft they were really the first peer to peer ride sharing company it wasn't uber

uber was a black car service originally with license. not just licensed drivers were professionally licensed drivers. lyft really changed that market and uber jumped into their market you're right most of these deca corns whether we're talking about pinterest, uber, whether you talk about slack, have been well financialsed private companies for a long time. that raises the question how much of a honeymoon do public investors give them relative to some of their peers and rivals that did go public early in their life cycle >> thank you what is the sentiment from lyft drivers and on the ground there especially given the fact some

of these employees had an opportunity to buy into this ipo. >> very early on they had enough to make a lot of money. they are contractor. they do not get to share in the wealth of the platform they helped built as i covered this company over the years and seen it raise more money in the private markets, this public debut is over its last private market. this gives it a market capital of about 25 billion dollar is worth more than a some established, profitable transportation companies >> thank you richard, good morning. what does this mean?

the smooth pricing of the ipo in terps of all the other ipos that will follow in it ts fos footst. i would agree slightly i think it's a bit about nasdaq as well. this was their largest ipo since facebook and 7 years ago to see this go as smoothly as it did, it's a win. >> how do you think about the lift to the other exchanges and the share prices when you think about 234 companies in 2019 going public with value indicati -- valuations up to $117. >> the beginning of last year was strong it started slow this year. all these new companies coming public will increase the activity the exchanges get a lot.

they get a lot more of the trading when they lift at that exchange >> will both the stock exchange and nasdaq be winners this year or is there one that could out perform in terms of the companies they bring to their sites versus another >> it's always a horse race between the two. certainly l lift is a big one that the nasdaq wants. it looks like uber is slated for the nnyc. these are two good competitors that both, it's too early to say that either one will -- i think it will be a good competition between both leading exchanges there. >> thanks for your insight this

morning. we appreciate it > >> as we go throughout the educati sessions, what will you be looking for? >> i'd say stability is item number one >> andrew was making an interest point in terms of companies going public later in their life cycle. sgr i would agree with the observation. there's been a tremendous amount of capital

>> lyft has been trading for about 15 minutes it's up nearly 20% continuing to follow this story and more, we'll toss it to the half thank you so much. we have lyft off the ride sharing company going public today in the biggest ipo since facebook back in 2012. shares opening about 20 minutes ago. an initial prop of more than 20%. so much to discuss this hour. from the company's business model, lack of profitability to whether you should buy this stock today. great to have you with us on this friday.