Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Uber Joins Lyft in Race to Tap Investors

wsj.com

Post reply on HN
Print view View original

81–90 of 139 posts

Re: Uber Joins Lyft in Race to Tap Investors

#81

Post by arcticbull »

wpietri wrote: post #4

Are they profitable? Last I heard they were losing quite a bit of money. [1] And even if they manage to squeak out a GAAP profit, I'm not sure if the business is sustainable. Given that a lot of the capital and operations costs end up on the books of drivers, it's harder to do the math for an end-to-end costs-vs-benefits comparison. [1] https://www.reuters.com/article/uber-results/uber-narrows-lo...

I want them to be successful because I have friends who work there, though I just don't see the numbers working out in ride-sharing.

Re: Uber Joins Lyft in Race to Tap Investors

#82

Post by dragonwriter »

erikpukinskis wrote: post #73
cinquemb wrote: post #62

Earlier quoted context omitted.

Agreed. FAANGMAN is down 22.4% from ATH, and probably in much better shape than Lyft or Uber. I'm probably going to wait for a pop in both prices of these (if they manage to go IPO anytime soon) and then short.

What’s the AN at the end?

Alibaba and Nvidia.

Search for FAANGMAN in https://www.cnbcfix.com/fast-money-archive-june-2017.html

Re: Uber Joins Lyft in Race to Tap Investors

#83

Post by arcticbull »

ndirish1842 wrote: post #59
crispytx wrote: post #55

$120 Billion valuation on $2.6 billion in annual revenue? Seems like a pretty steep price to me! Note: I believe that $2.6B figure that I found does not include the amount of ride revenue that goes to the drivers, so maybe that's why the valuation is so high. If you add back in the drivers share of the revenue, maybe the valuation isn't that crazy.

> $120 Billion valuation on $2.6 billion in annual revenue? That number is quarterly revenue (and as you say does not include the share the driver takes)

Pricing them at 12X net revenue out the gate is pretty aggressive to say the least. Especially when their margins were -60% back in 2016 and in late 2018, and if anything they've gotten worse with the recent price drops. [1, 2] It's not fair to compare them to the negative margins enjoyed by other tech companies as most software companies are zero-marginal-cost businesses. It's far from clear to me that people would pay the double price per ride it would take to break even.

A few years ago, if I'm not mistaken, they even switched to counting the entire value of an Uber Pool/Express Pool ride as net revenue (something they don't do with their core product offerings) muddying the water. Does anyone know if that's changed? [3]

$120B would price them at the same net revenue multiple as Square ($2.21B/yr @ 25B market cap) while Square has much, much better margins (0% vs -60%) - and is itself widely regarded as not being a cheap buy.

[1] https://techcrunch.com/2017/04/14/uber-shares-growing-financ...

[2] http://nymag.com/intelligencer/2018/12/will-uber-survive-the...

[3] https://www.bloomberg.com/news/articles/2017-04-14/embattled...

Re: Uber Joins Lyft in Race to Tap Investors

#84

Post by closeparen »

_2d30 wrote: post #41
sethbannon wrote: post #3

Just when you thought bay area housing pries couldn't get any crazier, Uber files for IPO same week as Lyft.

The number of Lyft and Uber employees is minuscule compared to the size of the housing market.

In the 6 months from October 2017 to April 2017, the San Francisco housing market was a couple thousand units, per the MLS [0]. Lyft and Uber each have thousands of headquarters employees. The number of employees who will make windfalls in 2019 is easily larger than the number of homes for which they’ll compete.

Minuscule compared to the housing stock sure.

[0] https://www.allisonchapleau.com/marketreports/san-francisco-...

Re: Uber Joins Lyft in Race to Tap Investors

#85

Post by jacksproit »

nopinsight wrote: post #64

Uber’s PR team probably rushed the news out right after Lyft’s IPO announcement to make sure that investors would spend as much time to consider its prospectus as they do Lyft’s. The possible market crash in 2019/2020 predicted by quite a few prominent economists and approximately $1 billion a quarter burn rate [1] have for a while been major reasons for their upcoming IPO. [1] https://www.bloomberg.com/news/articles…

There are enough economists that every possible prediction gets made. You shouldn’t lend credence to those who sow fear.

Re: Uber Joins Lyft in Race to Tap Investors

#86

Post by nopinsight »

jacksproit wrote: post #85
nopinsight wrote: post #64

Uber’s PR team probably rushed the news out right after Lyft’s IPO announcement to make sure that investors would spend as much time to consider its prospectus as they do Lyft’s. The possible market crash in 2019/2020 predicted by quite a few prominent economists and approximately $1 billion a quarter burn rate [1] have for a while been major reasons for their upcoming IPO. [1] https://www.bloomberg.com/news/articles…

There are enough economists that every possible prediction gets made. You shouldn’t lend credence to those who sow fear.

IIRC, it was a survey of at least almost a hundred economists and 80% said by 2020.

I also read reasonings by Roubini who predicted the 2008 Great Recession correctly and Martin Feldstein at Harvard. They sounded quite convincing.

Interestingly, I did not encounter any opinion by an economist that it is unlikely to occur before 2020.

The flurry of upcoming IPOs is also partial evidence of what top VCs and executives at major tech startups think.

Re: Uber Joins Lyft in Race to Tap Investors

#87

Post by khamba »

erikpukinskis wrote: post #73
cinquemb wrote: post #62

Earlier quoted context omitted.

Agreed. FAANGMAN is down 22.4% from ATH, and probably in much better shape than Lyft or Uber. I'm probably going to wait for a pop in both prices of these (if they manage to go IPO anytime soon) and then short.

What’s the AN at the end?

AMD, Nvidia

Re: Uber Joins Lyft in Race to Tap Investors

#88

Post by closeparen »

strict9 wrote: post #13
almost_usual wrote: post #5

So are these companies rushing to IPO before a 'potential' recession occurs? Does anyone else not feel confident about this? It seems fear driven and not very calculated. Maybe I'm missing the bigger picture..

Definitely fear driven. Recently we've seen the biggest sustained downward drops in five years for tech stocks, I think beginning the process now is just too late.

“Definitely?” I see articles on Lyft targeting an early/mid 2019 IPO at least as far back as August, months before the correction.

Re: Uber Joins Lyft in Race to Tap Investors

#90

Post by freyir »

wpietri wrote: post #4

Are they profitable? Last I heard they were losing quite a bit of money. [1] And even if they manage to squeak out a GAAP profit, I'm not sure if the business is sustainable. Given that a lot of the capital and operations costs end up on the books of drivers, it's harder to do the math for an end-to-end costs-vs-benefits comparison. [1] https://www.reuters.com/article/uber-results/uber-narrows-lo...

They're not close to profitable. Recent quarterly losses:

    Q1: $601 million net loss
    Q2: $891 million net loss 
    Q3: $1.07 billion net loss
I'm not an accountant, but I'm not sure how this can go well for them.
Post reply on HN