Lyft shares were having their worst day yet on Wednesday as the stock tumbled 6% 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 about $3 billion off its $18 billion valuation as of Wednesday morning and cut its share price by about $4.
“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 $63, down more than 9 percent in one week.
-CNBC’s Leslie Picker contributed to this report.
Watch: Uber is expected to sell $10 billion worth of stock in its IPO
