As the ride-hailing IPOs race is on, Blackmoon Financial Group today launched a new investment product that will allow users to make bets on the performance of Lyft Inc’s anticipated initial public offering (IPO).
The financial matchmaking platform says its traders can speculate on the valuation of the San Francisco-based company starting right from the date it becomes publicly traded.
The high-profile float could raise billions for Lyft, which is the smaller and less diversified rival of Uber, with some valuations at investment houses, are pegging with a potential market cap of around $25 billion.
Blackmoon’s product offers unique benefits that won’t be available when retail investors get exposure to the IPO with traditional stockbrokers. Specifically, the company has removed the lock-up period, which is a contractual restriction preventing certain investors from selling their shares after a company has gone public. Although this waiting period varies on a case-by-case basis, it typically ranges from three to six months after the date of the IPO.
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A bridge between retail investors and IPOs
Blackmoon also says its product combats many of the challenges faced by retail investors in getting access to IPOs, where their chances of bagging shares of a hot float are slim. Typically, in high-profile IPOs like Lyft, there is a general outcry that the shares were allocated to institutional investors while the majority of individual investors were unable to participate.
Moreover, Blackmoon does not require the user’s physical presence to pass verification which “excludes depressing red tape,” the company says.
Finally, Blackmoon explains its bidding process in a few painless steps.
- During the book building period, Blackmoon is accepting primary market orders for the IPO.
- To participate, investors must purchase BookLyft product for the nominal value, which they intend to place for the IPO.
- Before the first trading day, the IPO results will be released, and in case of successful allocation, BookLyft product will be converted to BMxLYFT.
- BMxLYFT will be priced at the gross IPO price and will provide investors with exposure to the performance of Lyft Inc. shares.
- In case of oversubscription, the allocation will be conducted on a pro rata basis. All unallocated funds will be returned to the investor’s dashboard in the currency of the initial purchase.
Founded in 2014, Blackmoon Financial Group is a US-based financial technology and investment management company with Russian roots. Blackmoon Crypto Platform presents what it calls a one-stop solution for asset managers to create and manage legally compliant tokenized funds. As such, it combines the benefits of crypto-oriented investment products with traditional diversification of investment opportunities.
The startup secures IT, compliance, licensing, and bank partnerships for its clients and the turnkey solution also issues the tokens of the Blackmoon Crypto Platform.