Lyft is wildly overvalued: NYU marketing professor

Lyft is getting a major lift from investors on its first day of trading, but some tech analysts are raising concerns about the long-term draw the ride-hailing company will have with investors.

“My concerns are, is this a great company or is it wildly overvalued? The answer is yes,” NYU Marketing Professor Scott Galloway told FOX Business’ Neil Cavuto on Friday.

Galloway also expressed concerns over profit shares Lyft drivers will see as a result of the the initial public offering (IPO).

“What Lyft and Uber are right now is an incredible transfer of wealth from drivers to riders,” he said. “I would argue that these companies have figured out the ultimate ninja move to kick the middle class in the groin by saying, ‘with 4,100 employees and our investors, we're going to split $25 billion and the 1.4 million drivers get between $8-$15 bucks an hour in flexibility.’”

Galloway added he that Lyft could get scale but said he thinks it is wildly optimistic that the sharing market in automobiles will grow to $200 billion or even $2 trillion.

"What is the single differentiation from Lyft than from Uber? There is none.”

Galloway also hinted at a possible future of a pricing war between ride-hailing companies that maintains negative margins.

"When you take a trip in Lyft and they charge you $12, it's really costing them $20. So it's economically irresponsible as a consumer not to take Lyft but for shareholders and investors, at some point when the music stops, this is going to be ugly," he said.

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Lyft debuted trading Friday at $87.24 a share, a more than 20 percent jump over what its initial pricing. Lyft disclosed in its IPO filing a 2018 loss of $911 million versus $688 million in 2017 and $682 million in 2016.