Lyft IPO...



Posted by Ed 3 mths 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:


Ed 3 mths 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 3 mths ago
Lyft continues to sink... now 12% below it's IPO price....

Ed 2 mths 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.

Ed 2 mths 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.

Ed 2 mths ago
Shell-Shocked Pinterest Slashes IPO Target After Lyft Disaster

Ed 2 mths 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.

Ed 2 mths 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 2 mths 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.

Two choices:

Buy into the IPO....

Pop over to Macau and...

Ed 2 mths 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.

Ed 2 mths 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.

Ed 2 mths 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 2 mths 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."

Ed 2 mths 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....


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 57 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'

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

Rideshare company lied about market share, claim investors

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

Ed 55 days 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.

Ed 41 days ago
Lyft Plunges As Revenue Doubles But Losses Soar Almost 400%

Just days after going public in what was the worst unicorn IPO in years, the company reported Q1 earnings after the close and they were a doozy.

First, the good news: the company which is seen as the Gunniea Pig to the upcoming Uber IPO, reported revenue which nearly doubled in Q1, rising 95% from $397MM in Q1 2018 to $776 million in Q1 2019, beating estimates by $38 million, as the number of active riders jumped by 46% from 14 to 20.5 million, continuing what has been an impressive trend over the past three years.

Additionally, the revenue per active rider also posted an impressive increase of 34% in Q1, up from $28.27 last year to $37.86 in the quarter ended March 31.

Despite a doubling in revenue, Q1 EBITDA was a loss of $216MM, virtually unchanged from the $239 million reported last year. And even though Lyft expects even more top-line growth in both the current quarter and full year, projecting total Q2 revenue between $800 and $810 million generating adjusted EBITDA loss of $270-$280 million, the full year projection is even more concerning, as LYFT now expect total revenue as much as $3.3 billion which, however, will result in even more cash burn, with the company projecting a full year EBITDA loss of $1.15 - $1.175 billion.

In other words, while Lyft - and Uber - scramble to capture market share and aggressively cut prices to capture the marginal driver, they are clearly doing it at the expense of operating leverage, profit margin and of course cash.

Stock down an additional 4%

Ed 41 days ago
Here's my idea --- I am going to bash my way into owning the coffee market in Hong Kong.

I am looking for HKD50,000,000,000 funding (message me if you are interested... don't tip off the SFC as this is not an approved investment... it's just an off the cuff thingy)....

Once I raise the cash I am going to start opening coffee shops across Hong Kong that will sell the absolute BEST coffee in the world .... for half the price of all competitors. Not only will my coffee be the best --- it will be sold at well below my cost...

I intend to lose at least $2.00 on every cup I sell.... that's my Business Plan! That's my genius for marketing at work.

How do you like that Starbucks? Take that Pacific Coffee.... you guys will be ghost shops within a week.

And then once I have driven these competitors into the gutter... looking for their broken teeth.... I will then .... increase the cost of my coffee to $8 per cup!

And I will soon be hanging with my new great mates the Kwoks... the Li brothers.... and those other fellow billionaires....

What's that? If I sell at 8 bucks competitors will attack me with $5 coffee....

Good luck with that .... because here's the Business Plan 2.0.... if anyone DARES to open another coffee shop in Hong Kong --- regardless of the price or quality of their coffee.... I will open a competing shop right next door.... undercutting the fool by half ....

No ... not 'a' shop ... I will open 5 shops in close proximity to the fool.... every direction you look there will be one of my coffee shops selling The Best Coffee in the World for half of what the competitor (the fool) is selling his mediocre blend for.

When you've got 50 billion dollars to burn through --- with the prospects being high to raise even more if you run out.... anything is possible.

Like I said.... if you want a piece of this action ... message me .... or just drop by the office with a suitcase full of cash.... and join me in Living the Dream!

Ed 40 days ago
Uber Drivers Protest Across the U.K. and U.S. But $9 Billion IPO Rides On

Simmering tensions between drivers and ride-hailing companies are flaring again, as drivers in major cities across the U.S. and the U.K. went on strike Wednesday over low wages and unstable working conditions.

Billed as an international protest in advance of Uber Technologies Inc.’s planned initial public offering this week, drivers in London and nearby cities said they would turn off their apps at 7 a.m. on Wednesday.

In the U.S., driver groups in Boston, Los Angeles, New York, San Francisco and other large cities said they would participate in the strike and encouraged users to boycott the apps as well.

There was little initial evidence of a lack of drivers in London or New York, two of Uber’s largest markets, with the app showing numerous rides available.

However, the threat of protests captured the attention of local politicians, with U.K. opposition leader Jeremy Corbyn tweeting that “Uber cannot be allowed to get away with huge payouts for their CEOs while refusing to pay drivers a decent wage and respect their rights at work.”

In the U.S., Senator Bernie Sanders called out Uber for paying its top five executives $143 million in compensation last year, including $45 million to its chief executive officer, Dara Khosrowshahi. “So why are Uber drivers struggling to put food on the table?,” Sanders tweeted. “I stand with striking Uber and Lyft drivers today. The greed has got to end.”

Ed 40 days ago
"Gestures of goodwill by Lyft and Uber to offer IPO stock to their most loyal drivers haven’t eased tensions."

If the Lyft IPO is any indication of what is going to happen to Uber shares post IPO.... this is hardly a gesture of goodwill....

Ed 39 days ago

Ed 38 days ago
House Flipper Zillow Lost $109K (37%) Per Flip, Net Loss Triples, Shares Soar

But this new & horrendous house flipping operation inflated revenues “more than expected.”

Zillow, which has generated an unbroken series of annual losses as a public company since its IPO in 2011, has figured out how to lose even more money, a lot more money, and at the same time boost revenues and get its shares to jump: house flipping.

In its quarterly earnings report Thursday evening, Zillow disclosed the dollars and cents of its newest enterprise, “Zillow Offers,” which buys and sells homes. The company describes this as “a new, hassle-free way to buy and sell homes directly through Zillow.”

The report splits out the business segments, including the “Homes” segment, which is its house flipping operation.

In terms of timing: The revenues, costs, and expenses associated with buying and selling the house are booked on the income statement in the quarter in which the sale of the house closes.

So let’s see how Zillow’s new thingy did in the quarter ended March 31:

Sold 414 homes.

Sales proceeds added $128.5 million to revenues, for an average selling price of $310,400 per home.

The purchase cost of these homes added $122.4 million to cost of sales, for an average purchase price of $295,700 per home.

This amounts to an average gross profit (selling price minus purchase cost) of a meager $14,700, or 4.9% per flip.

But it costs money to buy homes, get them ready to flip, market them, finance them until they’re sold, and deal with the transactions, in a corporate manner.

So Zillow booked the following expenses associated with its home flipping operations:

$20.8 million in sales and marketing expenses
$12.3 million in technology and development expenses
$14.4 million in general and administrative expenses
$3.8 million in “segment interest” expenses.
So, revenues of $128.5 million from selling the homes, minus $173.7 million in costs and expenses associated with these home sales, for a loss on its home flipping operations of $45.2 million.

This loss of $45.2 million on 414 home flips means:

Zillow lost $109,190 per flip on average.
Zillow lost 37% on each flip on average.

So this is a horrendous business.

But it performed miracles because the sales of those houses – a business activity Zillow didn’t engage in a year ago – added $128.5 million to revenues. This constituted three-quarters of the total revenue increase of $154 million (or 51%) to $454 million in total revenues in the quarter.

And due to the loss at its home flipping business, Zillow’s total loss soared by 263%. In other words, a 51% increase in revenues caused its quarterly loss to soar by 263% to $67.5 million. This loss amounts to a stunning 15% of revenues.

But Zillow is apparently not yet losing enough money, and so it is going to expand this ruinous home-flipping operation from the eight metropolitan areas at the end of March to more markets to boost its revenues and its losses. In home flipping, there are very few economies of scale; so we’re looking forward to seeing a beautiful cascade of losses.

Because revenues jumped like this – no matter that this caused Zillow’s losses to more than triple – shares soared 19% in evening trading on these “better than expected” revenues and the prospect that Zillow will expand its ruinous home flipping operation to many more markets and boost its losses further. Friday at about noon, some of the excitement of after-hours trading has tapered off and shares are up 8% and heading down.

When a stock market rewards companies that have always lost money, such as Zillow, for coming up with a way of losing even more money, it takes the incentive away for management to build a functional profitable business model. And it shows to what extent this market and the entire hype machine around it are twisted.

Idiocracy ... is here!

Ed 38 days ago
“How to buy a flipped house” by Zillow.

“Be on the lookout for telltale signs of rushed worked”
“Do your due diligence”
“Learn all you can about the flipper”

Ed 38 days ago
And my latest business venture involves setting up a shops in all the high end malls across Hong Kong starting with the IFC....

We will be selling the following:

Unlimited HKD100 bills will be available for HKD70....

I am aware of the losses this would incur ... but I intend to make that up on volume ... on economies of scale...

Any VCs in the audience want a piece of this? Just message me ... I'm standing by.

Ed 38 days ago
Lyft shares plunge more than 7% after middling Uber market debut

Lyft shares closed down 7.4% on Friday after its top competitor, Uber, had a disappointing market debut, falling 7.6

Since its IPO in March, Lyft has lost 29% of its value.

Ed 35 days ago
Investors Sue Lyft, Alleging IPO 'Overhyped' Lyft Inc. was sued by investors who claim the ride-sharing company overstated its market position when it went public last month, leading to a dramatic plunge in its stock price. ... Since going public March 28, Lyft has declined 17 percent to $59.51.

Uh...but there's this in the IPO prospectus:

“We have a history of net losses and we may not be able to achieve or maintain profitability in the future,” reads the second risk in Lyft's March 1 prospectus for an initial public offering. In other words, Lyft has never made any money, and can't promise that it ever will."

I wonder how many of those who were sucked into Lyft...also bought Uber....

If anyone is looking to blame someone for this fiasco... look here:

Ed 34 days ago
Lyft is down some 30% from its IPO price.

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