Lyft's (LYFT) stock falls to a new low

: lyft | Lyft, Inc. - Class A Common Stock News, Ratings, and Charts

lyft – Lyft shares tumbled Wednesday following skepticism around its valuation.

  • Lyft shares tumbled Wednesday following skepticism around its valuation and reports that Uber will unveil its public offering Thursday.
  • New York University professor Aswath Damodaran said on CNBC’s Fast Money Tuesday that Lyft should be traded closer to $59 per share with a valuation of $15 billion, which would shave about $3 billion from its current market capitalization.
  • Uber is expected to seek a valuation of $90 billion to $100 billion.

Lyft shares hit a new 52-week low on Wednesday as the stock tumbled 8% while investors expect its larger rival Uber to formally file to go public on Thursday. Lyft’s drop also follows skepticism about the ride-hailing service’s valuation from a top authority.

New York University professor Aswath Damodaran said Lyft should be traded closer to $59 per share with a valuation of $15 billion in an interview on CNBC’s Fast Money Tuesday. That would wipe nearly $3 billion off its $17.7 billion valuation as of Wednesday and cut its share price by about $3.

“The driver is a free agent. The customer is a free agent. There is absolutely no stickiness in the business, and they know it. That’s the basic problem I have with the ride-sharing business not just Lyft,” Damodaran said.

Damodaran’s criticism of ride-hailing extended to Uber as well, but the company’s valuation is expected to dwarf Lyft’s, with Reuters reporting it will seek between $90 billion and $100 billion.

CNBC confirmed that Uber expects to make public its IPO registration on Thursday and plans to sell about $10 billion worth of stock, making it one of the largest-ever tech IPOs.

Lyft has had a tough go during its first couple weeks on the public market. The stock’s IPO price was $72, but now stands around $62, down more than 11 percent in one week.

-CNBC’s Leslie Picker contributed to this report.

Correction: This story has been updated to reflect that Wednesday marked a new 52-week low for Lyft.

Lyft Inc. shares were trading at $62.01 per share on Wednesday afternoon, down $5.43 (-8.05%). Year-to-date, LYFT has declined -20.79%, versus a 15.68% rise in the benchmark S&P 500 index during the same period.

This article is brought to you courtesy of CNBC.

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