Category: BUSINESS

Lyft’s I.P.O. Was a Huge Success, Just Not for Investors Who Bought on Friday

Lyft’s stock market debut has set up its founders, employees, early backers and even those who scored shares in the initial public offering Thursday night for quite a windfall.

But not everyone who invested in the company is reaping the spoils.

Shares of the ride-hailing company rose nearly 9 percent on Friday. At over $26 billion, Lyft’s market value is almost double what private investors valued it at less than a year ago.

But Lyft’s first-day gain is measured off the I.P.O. price (which was set on Thursday, when shares were divided up mostly among large funds). Ordinary investors who wanted in had to wait to buy the stock until it was available on public markets on Friday, and at a much higher price than the big funds paid.

And those who bought as soon as trading began are already sitting on losses of a little more than 11 percent.

It serves as an important reminder that amid all the hoopla around trading debuts, small investors wind up taking a lot of the risk. Most of the gains on the first day of trading for a stock are realized with the first trade.

Over the past decade, companies listing shares on American stock exchanges have increased 14 percent from their I.P.O. price, according to Dealogic. But nearly all of the rise has come at the opening trade.

That dynamic has played out in many of the prominent I.P.O.s in recent years. Facebook shares opened 10 percent higher on their first day of trading and then proceeded to give back almost all those gains to finish essentially unchanged for the day.

Etsy was an extreme example of this. Its stock soared 94 percent on its first day of trading, but investors who bought at the open actually lost 3 percent by the close of trading.

And it’s not just tech companies. Levi Strauss recently made its return to the public markets, selling shares to investors at $17 a piece on March 20. The stock opened the next day at $22.22, a 31 percent jump. For the rest of trading that day, though, it climbed less than 1 percent.

Of course, if Lyft keeps growing as fast as Wall Street hopes it will, or works out how to turn a profit, then even the latecomers could wind up with respectable returns. Facebook shares are up more than 300 percent since their first day of trading, and after Etsy struggled for its first three years as a public company, its shares have more than doubled since they started trading.

Still, not being able to buy at the I.P.O. price also greatly affects returns over the next year. Investors who bought shares at the offering price have averaged a 22 percent increase over the past decade. Returns for those that bought at the open? Sixty percent less.

What to Do With Your Money in 2019 According to Financial Advisors

Money mistakes are a dime a dozen. Except, you know, they end up costing us a bit more than that.

Think More Critically About Your Resolutions

To prevent those costly financial blunders, we asked some financial advisors and professionals what clients tend to get wrong—and you should do differently going into 2019.

Don’t make News Year’s Resolutions. They don’t work.

Set your goals now, or in early January (after the holiday). The goals need to be realistic. This is key. If they are too hard or not remotely achievable, most folks give up before they even start. When setting goals, start small, then move up. For example, if you are contributing three percent to your 401(k) plan, increase it to four percent. Then plan six to nine months down the road to increase it to five percent.

Similarly, if your cash reserve fund is only one month’s living expenses, give yourself a period of time, say six months, to [get to] two months’ living expenses.

Small steps that are actually implemented have a much higher chance of staying implemented. Then you can go from there and again, slightly raise the goal.

The other thing people need to do is check in with their goals. This doesn’t mean following every movement in the stock market. This means reviewing your progress. This should be quarterly.

Pay Yourself First

The tumultuous markets sometimes cause people to quit contributing to their retirement plans, when we should do the opposite and continue to defer into our 401(k) or other retirement plans. If you are worried about volatility, you should still contribute, especially if you are many years away from retirement. Markets have historically gone through periods of decline and subsequently recovered.

READ MORE: https://twocents.lifehacker.com/what-to-do-with-your-money-in-2019-according-to-financi-1830992314?utm_source=pocket&utm_medium=email&utm_campaign=pockethits


Amazon tells some customers their emails have been exposed, but provides few details

Amazon Customers Email Breached in October

Amazon.com informed some customers Wednesday that their names and email addresses had been “inadvertently disclosed” as a result of a “technical error” but declined to provide further details about the security incident.

The e-commerce giant confirmed it sent the messages, adding in a subsequent statement it had “fixed the issue.” It did not say how many of its users had been affected or where and how emails had been exposed. Amazon said only that its website and other systems had not been breached.

Amazon’s limited disclosure, days before the Black Friday and Cyber Monday holiday shopping frenzies, drew sharp criticism on social media. Among its own sellers, some took to the company’s forums to complain about Amazon’s tight-lipped handling of the matter. “Who knows what they’re not disclosing about this,” one user wrote. “Hopefully nothing …”

Others questioned Amazon after it told users there’s “no need for you to change your password or take any other action,” fearing the potential that hackers still might try to use their names and email addresses for nefarious purposes, including phishing scams.

In October, Amazon said it reportedly fired an employee who inappropriately shared customers’ emails with a third-party seller. The incident, which Amazon said it was working with law enforcement to investigate, similarly resulted in messages to customers indicating their email addresses had been exposed.