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How to buy Lyft shares
This guide explores a brief history of Lyft, its stock market performance since going public in 2019, and gives you some idea of what to look out for before investing. You can also find links to the latest news and a comparison of the best brokers available.
Compare the best Lyft trading platforms
If you have all the information you need and just want to invest, the best place to buy shares in Lyft is through an online broker. We’ve assessed all the best options and listed them below so that you can choose one that works for you. If you’re not ready yet, keep reading to learn more about Lyft.
How to buy Lyft stock, a step-by-step guide
It isn’t complicated to get started on the stock market, so don’t worry even if you’re new to investing. These are the steps to follow in order to complete your investment:
- Choose a broker. The first thing you need is an online brokerage platform. There are many different options to choose from, each with their own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure.
- Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally you can expect to have to provide your name, email address, phone number, and some form of photo identification.
- Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in Lyft shares.
- Place an order for LYFT stock. Search for Lyft’s ticker symbol (LYFT) and see the current price at which the stock is trading. If you’re happy with the price, enter the amount of shares you want and place your order.
- Execute your order. Once you have placed your order, your broker will automatically execute it for you and your Lyft shares will be listed in your account. Congratulations, you’ve just bought shares in Lyft!
What is Lyft? And should I invest?
Lyft (NASDAQ: LYFT) runs an app that offers vehicles for hire and recently joined in with food delivery as well as ride-sharing, which is its main focus and the main source of revenue. It is second only to Uber in terms of market share in the US and actually beat its more famous rival to be the first ride-sharing company to go public in February 2019.
Both Lyft and Uber have had a turbulent time in recent years, with some bad PR, aggressive moves by city and state legislatures against them, and then the coronavirus pandemic on top. Lyft has sought to compare itself positively with Uber and has certainly had far less negative publicity. It has also stuck to the US and Canada as its focus of operations, compared to Uber’s more global approach.
Lyft stock is cheap relative to its initial offering and its volatility might interest short term investors looking to capitalise on quick rises. Longer-term, it is aiming to have a profitable quarter by the end of 2021, although the stock has been very up and down since going public.
How has the company performed in recent years?
Lyft traded at $78 when it first went public in 2019 but is yet to regain that price. The company has strained investor confidence in recent years by reporting losses ever since. Lyft had fallen to $40 before the pandemic hit, a slump driven by shaky revenue reports and fears over California state legislation that would have dealt a blow to the bottom line.
Pandemic induced lockdowns dealt Lyft a further blow in 2020, its share price crashed to almost $20, its lowest ever, as the first lockdowns hit California, and fell to similar lows again during the second wave later in the year. Some rare good news came from ‘Proposition 22’, an exemption to California state law that allowed companies like Lyft to keep treating their workers as independent contractors rather than full-time employees.
Proposition 22 passed on election day and was a big boost that sent Lyft’s price up back to pre-pandemic levels. The volatility it caused in Lyft’s price in the lead-up and aftermath is a warning of the sort of thing that could affect companies in the gig economy moving forward.
Is it a good time to buy Lyft shares now?
If Lyft is able to meet its target to be profitable in the near future, it may well be a good investment. It’s a risky stock until then, and even afterward as it is so sensitive to new regulation from any US state it operates in. The California exemption campaign was funded to the tune of hundreds of millions of dollars by gig-economy companies like Lyft and Uber, who would have been forced to pay significantly more in insurance and benefits to their workers had it failed.
Although it did fail, ride-sharing companies are particularly sensitive to new laws and regulations and are likely to have to fight similar battles in the future. Some cities have tried, unsuccessfully so far, to ban them entirely until they change their employment practices and it’s vital any potential investor keeps track of developments in any city or state Lyft operates in.
Investors also need to consider their openness to risk. Lyft’s rise in the aftermath of the California vote showed the potential for short term returns but the fact it has to deal with it at all shows how volatile the stock could prove to be. Lyft has a decent market share in the US – 30% of all rides – and is diversifying away from just ride-sharing into more logistical areas as well.
Lyft is targeting its first profitable quarter at the end of 2021 and that is a date to follow closely for signs of that changing. The market may be sensitive to upcoming revenue updates given Lyft’s debt levels and how fragile confidence has been in the past. You can stay up to date on the latest news from Lyft and the ride-sharing industry, as well as our market analysis, below.
Uber vs Lyft: Which Stock Is A Better Buy?
Buying, selling and trading Lyft shares for beginners
What to do before buying shares
You should always take the time to research a stock fully before investing your money, especially if you haven’t bought shares before. The more knowledge you have, the better your chances of making a wise investment.
With that in mind, here’s a checklist to run through first.
- Research the company. You should always examine the fundamentals of a company. What is Lyft? How did the company get its start? How did it grow? Is Lyft’s revenue and profit growth picking up? Is the company innovating? The more you know about Lyft, the better positioned you’ll be to make smart investment decisions.
- Make sure you understand the basics of stock investing. Before getting involved in buying stocks, make sure you have an understanding of how it works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
- Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
- Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
- Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. Our reviews of the best brokers can help you find the right platform for you.
- Examine broader market conditions. No stock exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and stock prices are falling, it’s best to wait it out and invest your money later when the stock is cheaper. If, however, the market is looking bearish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. Our news page can help you keep on top of movements in the financial markets.
What is the difference between buying, selling, and trading shares?
If you’re new to stock investing, then it’s important to understand the basics of all the options you can use to get your hands on Lyft shares. Here’s a quick run-through of what’s involved in each.
This process involves finding a broker and placing an order for Lyft stock, as outlined in the steps further up this page. Ideally you want to time your investment when the stock’s price is low so that you can profit by selling the shares after they increase in value.
When you sell any Lyft shares, you’ll want to do so at a higher price than the one at which you bought to earn a profit.
When you sell is up to you. You might decide to hold a stock for a long period of time, hoping to benefit from the company growing steadily throughout. Or, if you see that Lyft’s stock is already up a lot compared to the price you bought it and you’ve noticed that the stock market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the stock has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.
Trading is the same process, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.
You can trade Lyft shares through share dealing, or by trading with CFDs. These allow investors to speculate on stock prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.
Share dealing vs CFD trading
When it comes to investing in any stock, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors thinking long term tending to go for share dealing, and those looking for short term gains pursuing a more aggressive trading strategy.
Here’s a quick summary of the two approaches, and the pros and cons of each.
Share dealing refers to the practice of buying and holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from dividend payments or an increase in the stock’s price over time.
When investing your money this way, it is important to do thorough fundamental analysis of the company in which you are investing. You want to put your money in a stock you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter term peaks and troughs.
- Can build wealth over time to achieve financial goals
- Don’t need to be very reactive to short-term market movements
- Some stocks will give you an income through regular dividend payments
- Takes a long time to realise any profits
- Your capital is tied up in stocks and cannot be used for other investments
If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. Stock trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of a stock without having to take ownership of it. When CFD trading, investors are looking to buy and sell stocks fast to profit from short-term fluctuations in value.
One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into LYFT shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.
When trading using CFDs, it is key to be skilled at technical analysis and reading stock price charts. As you’re trading stocks quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its stock price will rise and fall minute-by-minute.
- Can generate fast profits if you read the market right
- Some platforms allow you to trade with leverage
- Prevents your capital from being tied up so you can take advantage of investment opportunities
- Trading with leverage is risky and can lead to big losses
- Doesn’t necessarily generate growth over the long term
Consider which approach suits you best and craft an investment strategy that works for you. If you need more information, then simply take our stock trading course and read our guide to CFD trading to get you up to speed.
How to choose a broker
With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large these are the aspects you should be considering when selecting a broker:
- Range of stocks available. The most important thing is that you can actually find the shares on your broker. Some brokers offer more stocks than others, and many will allow you to trade other assets, such as forex and commodities.
- Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
- Regulation. You should only use regulated brokers to place trades. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
- Payment methods available. You might want to use a specific payment method, such as PayPal, to fund your account. Not all brokers accept every payment method, but using our comparisons you can search only the brokers that support the option you’re looking for.
- Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
- Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.
Latest Lyft news
RBC’s Brad Erickson sees an about 30% upside in Lyft stock
Lyft turns EBITDA profitable for the first time in Q2
Should you invest in Didi as it trims 28% debut gains?
Lyft sells its autonomous driving technology unit to Toyota Motor
Lyft reports narrower than expected per-share loss in the fourth quarter
Lyft says it will turn EBITDA profitable by the fourth quarter of fiscal 2021
Try some of our stock market courses for beginners
To learn more about investing, check out Invezz’s educational courses. Doing so will help prepare you to buy, sell, and trade shares of Lyft, and increase your investment knowledge in general so you can diversify your strategy.
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Fact-checking & references
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Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >