Now that a Lyft IPO could happen as early as 2018, the ride-sharing company is making waves with a crucial new hire.
Lyft has hired Katie Dill as its new VP of Design, taking her away from a key spot with online hospitality service Airbnb, according to an Oct. 23 TechCrunch report.
Lyft appears to be ramping up its efforts ahead of an IPO as it announces new hires and major deals.
Here is our latest Lyft IPO news about Dill and her new position...
In July 2014, Airbnb unveiled its rebranding campaign that included a new logo and website.
One of the key members of that brand identity team was Dill, the director of experience.
Lyft was so impressed that they hired her on Oct. 23, where she will oversee the company's design activity as it relates to products and user experience.
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Dill believes her Airbnb experience will translate well to her role at Lyft because she views both as hospitality companies, according to the Oct. 23 TechCrunch report.
And creating a stronger brand based on trust between strangers can only help Lyft's prospects for an upcoming IPO...
We won't see a Lyft IPO in 2017, but the company is quickly moving toward a market debut for 2018.
The company reported on Oct. 11 that it reached 500 million rides after claiming some U.S. market share from Uber. Lyft completed just 53.3 million rides in 2015, but that increased 136% to 162.6 million rides in 2016.
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Since Uber is Lyft's biggest competitor, highlighting such a large gain is a way to attract more investors.
It might have already worked, as Alphabet Inc. (Nasdaq: GOOGL) led a $1 billion funding round for Lyft through its investment arm, CapitalG, on Oct. 19.
But just because Lyft is increasing its ride totals and receiving investments from Google doesn't mean it's a good investment for you.
Before buying Lyft stock, here's what Money Morning Director of Technology & Venture Capital Research Michael A. Robinson wants you to know...
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Robinson doesn't believe retail investors should invest in overhyped IPOs.
"I generally tell retail investors to avoid buying an IPO at the open because the insiders have already made all the money available at the debut," Robinson said.
You see, prices can soar for a few days after a company goes public, which nets early investors the biggest gains. However, retail investors are often buying in at an inflated price, and stock prices after a public offering can be extremely volatile.
But he has one exception...
"My exception to this rule is to put in a limit order that is fairly tight from the offering price. Otherwise, the risk is you buy at the top and then go upside down. That's a big risk to carry with a new issue that hasn't hit the lock-up date," Robinson said.
However, we have one strategy that lets you safely profit from the hype these IPOs create without the risk that can come with buying at the IPO price.
Robinson advises investors to purchase an exchange-traded fund (ETF) that mimics the broader market for IPOs. It's the First Trust U.S. Equity Opportunities ETF Fund (NYSE Arca: FPX).
Because FPX is an ETF, retail investors can buy and sell it just like a stock.
And because FPX holds a mix of recent IPOs, it's diversified. That makes it less risky than owning just one stock.
Since FPX owns more of PayPal Holdings Inc. (Nasdaq: PYPL) (7.59% of its holdings) than Snap Inc. (NYSE: SNAP) (1.06% of its holdings), for example, it balances out the risk of IPOs. If FPX just owned shares of SNAP, FPX would be down 38.56% so far in 2017. But the PYPL stock price is up 88.02% so far in 2017, and it accounts for a much larger position than Snapchat.
According to FTPPortfolios.com, FPX's holdings include the 100 largest and most recent U.S. public offerings.
It currently holds IPOs that rolled out over the last several years, including Match Group Inc. (Nasdaq: MTCH) and Blue Buffalo Pet Products Inc. (Nasdaq: BUFF).
And it also holds newly spun-off companies like AbbVie Inc. (NYSE: ABBV).
This structure lets you profit from IPOs and new public companies without the risk of owning just one stock. And for investors looking to outperform the market with safe investments, FPX is beating the Dow right now.
This year, FPX has climbed 22.01%. In comparison, the Dow is up only 19.21% in the same time.
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