Displaying items by tag: Uber

(Washington)

Lyft, DoorDash, and Uber saw all of their stocks fall…see the full story on our partner Magnifi’s site

(Seattle)

One of the things that makes Amazon such an extraordinary company is that it is always on the look out for the next great business opportunity, and always seems to be one step ahead in executing it. AWS anyone? Now the champion of Seattle may be eyeing a new target—ride-sharing. Amazon is considering the acquisition of Zoox, a well-known autonomous vehicle company. If it were to acquire Zoox, it would immediately be in competition with Uber and Lyft in the soon-to-be autonomous ride-sharing market.

FINSUM: We assume Amazon also has some yet-to-be-understood purpose for this beyond just competing with Uber and Lyft. For instance, autonomous delivery/logistics vehicles?

(San Francisco)

2019’s IPOs could hardly have gone worse. If you take the average performance of the top IPOs this year—Lyft, Uber, Pinterest, and Chewy—you see a loss of 30%. That is phenomenally poor considering the hype of these companies coming into their IPOs. And what’s worse, that figure doesn’t even count the worst one of all—the failed WeWork IPO. However, one company which looks like it has suffered unnecessarily and deserves a long-term bet is Slack, the office communications technology. It has a highly sticky user base and is not burning cash at anything close to the rate of the others. Users report that it is almost impossible to stop using Slack’s service once your office has converted to it.

FINSUM: Slack is essentially trying to replace internal office email. That is a long road but there has been a lot of early success. It seems like it is worth of a long term bet, especially after selling off by 43% this year.

(New York)

There has been a lot of anger (and even legal action) about the big declines Lyft has seen since its IPO. The questions around publicly traded companies worth tens of billions of Dollars with annual losses of billions of Dollars are only growing more intense as Uber readies for its IPO. The big question is what investors should do about the stocks—stay away or buy in? TrimTabs Asset Management has some very salient thoughts on the issue. TrimTabs specializes in free cash flow oriented products and lent their expertise to this question. They conducted an in-depth study of how post-IPO companies with negative free cash flow, and negatively trending free cash flow, perform versus those with positive FCF. The results were stark, and in all instances showed major outperformance of FCF positive companies. For instance, over a 12-month horizon following IPO, $1 bn+ companies with positive FCF outperformed those with negative FCF by almost 16%, with the latter averaging losses of 6.41%.

FINSUM: This analysis from TrimTabs could not be more timely or insightful. We think it might be smart to stay away from Uber and Lyft until they at least have a clear path to profitability.

(Silicon Valley)

The next couple of years is supposed to be the new golden age of tech IPOs. Huge Silicon Valley unicorns like Uber and Lyft ae supposed to IPO, as are a slew of less well-known, but still big, names. All the activity is supposed to kick off very soon as Lyft has just priced its IPO. The company is seeking a valuation of about $23 bn based on an offering of just over $2 bn of shares. Uber, its rival, is planning to IPO soon as well, and looking for a valuation north of $100 bn.

FINSUM: Let’s put the Lyft valuation in perspective—the company has $2.16 bn of annual revenue, but lost almost a $1 bn in the last year. Quite eye-opening.