Lyft IPO...




Search  

ORIGINAL POST

Posted by Ed 26 days ago
Lyft, a company that lost nearly $1 billion last year, a company that loses money on every ride, and does not appear to have a business model that is sustainable.... IPO'ed yesterday....

Here's how that worked out:


https://wolfstreet.com/2019/03/29/lyft-shares-plunge-10-in-4-hours-from-pop-to-close/

COMMENTS

Ed 26 days ago
Actually they do have a business model ... just like Uber... and Tesla ... and Netflix... We-work....and so many other companies these days...

Burn through money ... raise more money ... burn through that money ... rinse repeat.... profits do not matter - ever. So it seems....

Ed 22 days ago
Lyft continues to sink... now 12% below it's IPO price....

Ed 20 days ago
Lyft short-sellers are in ‘overdrive’ after IPO

In just a few days since Lyft Inc.’s long-awaited initial public offering, the ride-hailing company’s shares have become the second-largest short in the U.S. trucking sector.

That’s according to Ihor Dusaniwsky, managing director of financial analytics firm S3 Partners, who wrote Wednesday that Lyft LYFT, +1.49% short-sellers have “gone into overdrive,” shorting more than 38% of the 32.5 million share float.

“We can expect Lyft to be a significant short in the market for long time, especially with analysts already posting ‘sell’ recommendations less than a week after its IPO,” Dusaniwsky said.

https://www.marketwatch.com/story/lyft-short-sellers-are-in-overdrive-after-ipo-2019-04-03

Ed 20 days ago
"Look at what happened with Levi's, an old, staid company with great cash flow [and] boring growth metrics, versus Lyft, which has fantastic growth and sales, but makes absolutely nothing," Kevin O'Leary, chairman of O'Shares ETFs and co-host of "Shark Tank," said Monday on CNBC's "ETF Edge."

"I always ask myself when I'm buying a stock, what portion of the free cash do I get in the form of a dividend each quarter? And the answer is obvious. You can measure it with something like a Levi's, but there is no free cash at Lyft," he said.

"We can debate this till the cows come home, but that's a very treacherous stock. It makes no money."

O'Leary called Monday's action in Lyft "extremely negative," especially considering all of the IPO buyers that are now losing money on Day 2. He added that these declines will likely "tamper enthusiasm" for other highly anticipated offerings, including that of social media company Pinterest and Lyft rival Uber.

https://www.cnbc.com/2019/04/02/lyft-is-a-treacherous-stock-action-is-extremely-negative-oleary.html

Ed 15 days ago
Shell-Shocked Pinterest Slashes IPO Target After Lyft Disaster

https://www.ccn.com/shell-shocked-pinterest-slashes-ipo-target-after-lyft-disaster

Ed 13 days ago
LYFT Plummets 30% From Opening Highs As Uber IPO Process Begins

Lyft shares crashed further to new record lows today following reports that its dominant rival Uber could be filing for an initial public offering as soon as Thursday.

https://www.zerohedge.com/s3/files/inline-images/2019-04-10_9-07-07.jpg

https://www.zerohedge.com/news/2019-04-10/lyft-plummets-30-opening-highs-uber-ipo-process-begins

Ed 13 days ago
Hmmmm.... perhaps a company actually has to have at least the potential to turn a profit to be successful on the stock market after all...

What a ridiculous notion!

Ed 13 days ago
Uber Discloses 3-Yr $10-Billion Loss from Operations, Stalling Rideshare Revenue & 50 Pages of “Risk Factors” that Are Not for the Squeamish


Uber Technologies’ IPO filing was made public today. The 330-page or so S-1 filing disclosed all kinds of goodies, including detailed but still unaudited pro-forma financial statements as of December 31, 2018, huge losses from operations, big tax benefits, large gains from the sale of some operations, stagnating rideshare revenues, and an enormous list of chilling “Risk Factors” that go beyond the usual CYA.

https://wolfstreet.com/wp-content/uploads/2019/04/US-Uber-2018-revenues-losses.png

https://wolfstreet.com/2019/04/11/uber-ipo-filing-discloses-3-year-10-billion-loss-from-operations-rideshare-revenues-stagnate-50-page-risk-factors-are-not-for-the-squeamish/


Two choices:

Buy into the IPO....

Pop over to Macau and...

https://www.fairfaxstatic.com.au/content/dam/images/1/3/o/f/y/1/image.related.articleLeadwide.620x349.13ofdx.png/1435704247281.jpg

Ed 13 days ago
These are some of the risks mentioned in the IPO:

Uber may never become profitable: We have incurred significant losses since inception, including in the United States and other major markets. We expect our operating expenses to increase significantly in the foreseeable future, and we may not achieve profitability.


The personal mobility, meal delivery, and logistics industries are highly competitive, with well-established and low-cost alternatives that have been available for decades, low barriers to entry, low switching costs, and well-capitalized competitors in nearly every major geographic region. If we are unable to compete effectively in these industries, our business and financial prospects would be adversely impacted.

We may experience significant fluctuations in our operating results. If we are unable to achieve or sustain profitability, our prospects would be adversely affected and investors may lose some or all of the value of their investment.


Our business would be adversely affected if Drivers were classified as employees instead of independent contractors. The independent contractor status of Drivers is currently being challenged in courts and by government agencies in the United States and abroad.


If our growth slows more significantly than we currently expect, we may not be able to achieve profitability, which would adversely affect our financial results and future prospects.

We will require additional capital to support the growth of our business, and this capital might not be available on reasonable terms or at all.

https://wolfstreet.com/2019/04/11/uber-ipo-filing-discloses-3-year-10-billion-loss-from-operations-rideshare-revenues-stagnate-50-page-risk-factors-are-not-for-the-squeamish/

Ed 12 days ago
Hubert Horan: Can Uber Ever Deliver?

Part Eighteen: Lyft’s IPO Prospectus Tells Investors That It Has No Idea How Ridesharing Could Ever Be Profitable

The critical characteristic of ridesharing companies (such as US based Uber and Lyft, or Asian based Didi, Grab or Ola) has nothing to do with smartphone apps or competitive advantage or operational efficiency.


It is the fact that they are backed by billions in cash from venture capitalists who have been willing to subsidize years of massive losses.

Instead of consumers choosing the most efficient car service, those subsidies led them to choose the company that didn’t charge them for the actual cost of the service, and provided far more capacity than could be economically justified.

Instead of funding the companies with the strongest sustainable competitive advantage, those subsidies led investors to fund the companies with the artificially inflated growth rates that suggested a path to quasi-monopoly market dominance.


Under private ownership, the claims that the ridesharing companies had created unprecedented levels of economic value ($70 billion for Uber, $15 billion for Lyft) had never been subject to any broad-based analyst or investor scrutiny.


This series has argued that the unprecedented accomplishment of ridesharing is that its entire valuation was manufactured out of thin air.


The valuation of other large Silicon Valley based companies (Amazon, Facebook) may be seriously inflated, but they had clearly established legitimate economic foundations, including powerful product and operational innovations, profits and strong cash flow.

https://www.nakedcapitalism.com/2019/03/hubert-horan-can-uber-ever-deliver-part-eighteen-lyfts-ipo-prospectus-tells-investors-no-idea-ridesharing-ever-profitable.html

Ed 12 days ago
On what basis does Lyft argue that investors should value it at $20-25 billion?


Lyft’s prospectus makes no attempt to provide investors with data-based explanations of how it could achieve sustainable profitability or strong ongoing equity appreciation.

One presumes that the stated $20-25 billion valuation targets simply reflect the financial ambitions of Lyft’s owners and investment bankers.

Even if one uses the crude metrics such as multiples of revenue often used for valuation guestimates, these targets implausibly imply future appreciation potential stronger than Facebook’s. [11]


Lyft’s IPO prospectus appears targeted at investors who are willfully ignorant of industry economics but are willing to risk their capital on the basis of emotive narratives.[14]

People willing to respond to long term industry “visions” but unwilling to think about the (false) claims about cost competitiveness they are based on, or recognize that the predictions based on that vision were all wrong.

People willing to respond to claims about “core values focus on authenticity, empathy and support for others” but unwilling to recognize that the IPO that could make its founders billionaires depends on having unilaterally cut driver take-home pay down to minimum wage levels.

Ed 9 days ago
Another day, another collapse in LYFT's stock price (down 7 of the 12 trading days in its lifetime) - now down 37% from its highs and 22% below its IPO price.

The driver of today's weakness - if one needs a catalyst - is that Lyft has pulled thousands of electric pedal-assist bikes from the streets of New York, San Francisco, and Chicago.

The company, which operates bike-share programs in roughly a dozen US cities through its acquisition of Motivate in 2018, said the move was out of an abundance of caution and only affecting the three specific cities.

Meanwhile, as Bloomberg reports, short investors have already begun racking up positions. According to financial analytics firm S3 Partners LLC, there has been active short selling in Lyft shares, with a staggering 75 percent of the free float held short.

In a report published on April 12, S3’s managing director of predictive analytics Ihor Dusaniwsky said Lyft short sellers have fared better than post-IPO long shareholders.

Shorts were up $43 million in mark-to-market profits on Friday, bringing their post-IPO profits to $202.4 million, Dusaniwsky wrote.

Don't worry about the IPO pipeline though - as CNBC's Bob Pisani confirmed: "LYFT is a one-off."

https://www.zerohedge.com/news/2019-04-15/lyft


https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/2019-04-15_8-39-25.jpg

Ed 9 days ago
Let me take you back in time.... it's 1991.... and I've just stepped off the plane into the horrific heat and humidity of Hong Kong.... don't know a soul in the city but here I am... ready to make it happen...

Unfortunately .... there were no co-working spaces back then so I had to survive on my wits .... no hipsters to help....


So.....

I get in a cab to the hotel in Central.... and I'm taken through the Eastern Harbour Tunnel ... I can see the skyscrapers that surely must be Central ... poking up in the other direction so I ask the cabbie if this is the right way....

At this time cabbies barely spoke English ... however he was able to convey to me that there was another tunnel but that it was 'very traffic'..... to which I said --- it's 630am.... there ain't no traffic....

Alas we are already embarked on the journey to The Big Day Cabbie Fare and there was not turning back the clock...

Anyway ... thoroughly pissed ... I have this 'Uber-like' idea pop into my head.... I would start up the Honest Cab Company --- catering primarily to ignorant expats and tourists.... who are constantly getting jacked for Big Day Cabbie Fares....

As I had limited means ... I decided I'd focus on airport pickups only....

So off I trundled to the used car lot .... bought myself a decent Toyota mini-van.... then off to the signage shop.... to get a big magnetic sign to affix to my van 'Honest Cab Company Tel: 2765 5555

To hell with commercial insurance ... licenses ... training....and all that crap --- I was gonna offer the best fares in Hong ... undercut those bastard cab drivers whose only goal in life was one more Big Day Cabbie Fare.... and the only way I could do this was cutting overheads...


So off I went to the airport ... I parked outside .... and whenever I saw a bewildered new arrival sweating and puffing in the heat ... I approached and said ... my good sir... may I help you with your satchels? Can I offer you a ride into town --- FIXED cheap fares! - NO rip-offs.....

Inevitably ... I would quickly get a fare .... and over the course of a day I was keeping very busy.... I was making big dollars.... I had a Looey Vitton change purse.... shirts from Ascot Chang.... a nice apartment Robinson Rd.... various eye-catching girlfriends....

I was Living the DREAM. The Hong Kong DREAM.


But then.....

One day .... I pulled up at the airport ... and a policeman signalled me to pull over.... running a taxi are ya? Where's your license and insurance?

Of course I had none of these.... wham bam a fine of $5000 on the spot.... and if we catch you again we'll toss you in the Stanley Prison with the other varmints and riff raff... and we'll take your van.


Oh GAWD.... what was I to do.... I had all these credit card bills to pay ... and mistresses to support... and rent on the nice apartment....

So the next day I returned to the airport .... wary of any police presence.... and went about my Uber-like business....

A week passed .... no more fines... then a month.... and then....

One day I am walking to my van with a family who had hired me to take them to Happy Valley....

Suddenly!!! 4 mad dogs covered in tattoos launched themselves at me..... Yik yam yik yam they shouted as they beat and kicked me ... gweilo die gweilo die.... no taxi you ...

The family looked on in horror as I was taken apart by what were obviously some obscure branch of the Triads....

They then proceeded to slash my tires... bash in my van ... bust up the windows....and pour a sack of salt into my petrol tank ... all the while shouting ... you go... you go.... you no taxi.....

Needless to say .... that ended my 'Uber-like' venture.... I declared bankruptcy .... and I took a job as a minibus driver....


Fast forward 3 decades..... I was obviously Before My Time.... my genius only now is obvious.....


As the saying goes... timing is everything.... by all rights.... I should be IPOing... unloading my illegal taxi service on DelusiSTANIs.... and beginning a new and prosperous chapter in my life.....

Ed 3 days ago
And while on the topic of businesses valued at billions ... that loss billions... and will never generate profits...

We have MoviePass... which ... when faced with gargantuan losses.... changed the offering to their members...

And abruptly lost 90% of their subscribers....

'In an attempt to give the melting ice-cube a few more months before pulling the plug, last month Helios and Matheson said it raised a $6 million new round of financing from “certain institutional investors,” which closed March 25'



https://variety.com/2019/digital/news/moviepass-subscribers-loss-crater-225000-1203192468/


Wonder who these investors are... I am going to think their DelusiSTANIs ... you know... people who live in delusiSTAN ... who believe anything they are told... and are willing to back their beliefs up with cold hard dollars... that will of course be quickly flushed down the toilet....

Ed 3 days ago
Double trouble for Lyft after share price drop sparks class action lawsuits claiming hype

Rideshare company lied about market share, claim investors

https://www.theregister.co.uk/2019/04/19/lyft_class_action_lawsuits/


Meanwhile this is what Cramer on CNBC had to see pre-IPO:

"You want to get as much Lyft as you can," Jim Cramer said leading up to the IPO on March 28.

"So get in there, try to get as much Lyft as possible, because the way deals work is that the brokers all know they have a ton of merchandise to move. So, what they do is they would whet your appetite with some really tasty morsels and Lyft will be a tasty morsel," he continued.

On March 29, Cramer called Lyft's $87 opening price a "win for the system". Cramer commented in an article for The Street:

"Lots of people were quite cynical about the whole process, instantly jumping to the conclusion that the stock was ridiculously overvalued and the brokers ripped off the customers. That's just not true."


He then called $87.24 a "good price" for the company on Twitter. Days later, while defending Lyft as it plunged back through the $70's on CNBC, he claimed people should look at it as an investment because the company had "a good balance sheet".


Which kinda makes one wonder... is Cramer getting paid to hype certain stocks?


It wouldn't be the first...

John McAfee reveals he charges $105,000 per promotional cryptocurrency tweet

https://www.theverge.com/2018/4/2/17189880/john-mcafee-bitcoin-cryptocurrency-twitter-ico

Ed 18 hrs ago
More money-losing companies than ever are going public, even compared with the dot-com bubble


Eighty-three percent of the U.S. companies that have gone public so far in 2018 had lost money in the year leading up to their IPO, according to data compiled by University of Florida finance professor Jay Ritter.


This is the highest proportion since 1980, according to Ritter’s data.

https://www.cnbc.com/2018/10/01/more-money-losing-companies-than-ever-are-going-public.html


< Back to main category


>

Login now