Lyft co-founder and President John Zimmer, acknowledging the rough ride on Wall Street since their March initial public offering, said on Wednesday that he believes the stock is a good buy right now.
“I care about our employees that have jobs from us, that have in some cases equity from us,” Zimmer told CNBC’s Wilfred Frost from the RBC tech conference in New York City. “I feel a deep amount of responsibility.”
However, he said, “I feel like the stock is undervalued. We’ve had three quarters of beating expectations, and over time people will see us put up more numbers and it will solve itself.”
Lyft priced its IPO at $72 per share on March 28. When trading started the next day, the stock was up as much as 23% during its first session, before closing just 8.7% higher. In early April, Lyft bounced around near its offering price. But since then, it plummeted nearly 40%, as of Tuesday’s close. It’s one of the worst-performing IPOs of the year.
Lyft President John Zimmer (R) and CEO Logan Green speak as Lyft lists on the Nasdaq at an IPO event in Los Angeles March 29, 2019.
Mike Blake | Reuters
Asked whether he thought the company priced the IPO too high, Zimmer said, “Over our course of history, we’ve made a lot of our investors a lot of money,” expressing confidence that the company will be able to get the stock on track.
Last month, Lyft reported a $1.57 per-share loss in the third quarter that was smaller than analysts had forecast on better-than-expected revenue of more than $955 million. The company also raised guidance on fourth-quarter and full-year revenue.
However, Lyft’s net loss of $463.5 million during the third quarter was much wider than the net loss of $249.2 million a year ago. The company blamed the increase in net losses on $246.1 million in stock-based compensation and related taxes tied to its IPO.
Watch the full interview with Lyft co-founder and President John Zimmer on Wednesday afternoon at 3 p.m. ET on CNBC’s “Closing Bell.”