Mubasher: Investors in ride-sharing giant Lyft are suing the firm on the grounds that it overhyped its market position ahead of its anticipated initial public offering (IPO), Bloomberg News reported.
Two class-action complaints have been lodged on Wednesday against Lyft, its officers, directors and underwriters in a San Francisco court, the news outlet reported.
The ride-hailing company said in its prospectus that it held 39% of the market, an overstatement as claimed by the investors.
In addition, plaintiffs in both lawsuits also mentioned that Lyft failed to inform investors of its decision to recall more than 1,000 bikes in its ride-sharing programme, Bloomberg said.
Since going public on 28 March, Lyft’s share price endured a dramatic dive, shedding 17% to $59.51, compared with the offering price of $72.
Lyft’s stocks saw a sharp sell-off following its rival Uber’s IPO filing last week