Lyft's IPO: Shares Pop at Open, But Time Horizon Is Biggest Key For Investors

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Shares of Lyft (LYFT) - Get Report  debuted Friday morning, with pent-up demand from investors propelling shares to open at $87.24, 21% above its $72 offer price.  

Regardless of where it goes from there,  here's some advice all investors should hang on to:

"An investor should really maintain focus on time horizon," said Alejandro Ortiz, Principal Analyst at Sharespost, a provider of both research and liquidity to investors in private companies and unicorns. "These are really long plays if you think about the growth prospects of these companies, and that's really the focus." 

Price discovery can be hard to come by for brand new public companies, and the shares can either dive or ride high immediately upon issuance. For big tech companies like Lyft, pent-up demand to own potentially explosive growth can drive the stock higher on its debut. Snap (SNAP) - Get Report rose to $27 a share on IPO day in Mach of 2017, after listing at $17; it's since fallen to about $11, however. 

But Lyft, while in heated competition with Uber, has the potential to grow rapidly. "Their [newly public growth and tech firms] ridiculous growth rates are why they're valuable, and that being said, that growth needs to eventually capitalize, so again, I'll say it's a long time horizon investment," Ortiz said. 

Related.Investors Are Eager to Ride With Lyft IPO on Friday

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