Lyft’s revenues double, losses quintuple and prospects darken
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Re: Lyft’s revenues double, losses quintuple and prospects darken
#2It's fun watching these "smart" economists trying to tell you what's going to happen, with Lyft and with the upcoming Uber.
The reality is that many people will feel they're able to "beat the market", and they will try to get a chunk of the glory, mostly losing in the effort.
Re: Lyft’s revenues double, losses quintuple and prospects darken
#3"...and prospects darken"
It doesn't actually sound like that from the body of the article.
I have no idea if this is true or not, but the story says most of the $1.14B loss was due to booking employee stock based compensation of $894M. I'm assuming that's come out of the IPO and is not a recurring cost.
With revenues of $776M, which perhaps are mostly recurring, doesn't that seem to bode well for the future?
Of course, I'm not sure what we can expect their actual on-going costs or revenues to be. I'm just not seeing any reason for concern in this article fter the headline.
Re: Lyft’s revenues double, losses quintuple and prospects darken
#4When Lyft was doing their road show there were a few analysts who had price targets of $45 as Lyfts fair value at IPO with an acknowledgement that the amount of shares available would double, and possibly triple when all shares were off restriction, meaning that the $45 price target was a best case and we would probably see far lower once people can sell.
This is a company that has maybe 33 million shares outstanding now with about 27 million of them being sold short. So they have an enormous short bet against them. We see borrow rates as high as 30% for borrowing shares to short with no real stable borrow available.
However, due to the enormous amount of those short shares being rehypothicated(relent), Lyft is vulnerable to a quick upwards price run if those long sellers ask for their shares back. That would cause a run on those shares as they may be lent out multiple times by the same bank.
So whenever someone ask why you don't short an individual stock its always valid to answer that you believe you are right in the long term but the short term could wipe you out if you shorted.
As a quick edit, uber is now indicating its opening at a range of 45.50-46.50, given that the IPO price was $45, it looks like the underwriters will have some work to do and will almost certainly exercise their green shoe option.
So maybe wallstreet is wising up to money losing companies or Uber learned from Lyft that a slow and steady approach to their share price would be better long term for them?
Re: Lyft’s revenues double, losses quintuple and prospects darken
#5I previously submitted 'Uber’s enormous, vague IPO prospectus is an outrage (ft.com)'
Well worth reading and quite ominous in light of Lyft performance IMO
https://www.ft.com/content/60ab80e2-6a8b-11e9-9ff9-8c855179f...
Re: Lyft’s revenues double, losses quintuple and prospects darken
#6I previously submitted 'Uber’s enormous, vague IPO prospectus is an outrage (ft.com)' Well worth reading and quite ominous in light of Lyft performance IMO https://www.ft.com/content/60ab80e2-6a8b-11e9-9ff9-8c855179f...
This is an image of the comment for those that don't have access to FT.com https://twitter.com/bytebot/status/1117323665865969664
Re: Lyft’s revenues double, losses quintuple and prospects darken
#7"...and prospects darken" It doesn't actually sound like that from the body of the article. I have no idea if this is true or not, but the story says most of the $1.14B loss was due to booking employee stock based compensation of $894M. I'm assuming that's come out of the IPO and is not a recurring cost. With revenues of $776M, which perhaps are mostly recurring, doesn't that seem to bode well for the future? Of cour…
There total expenses was 1,932,917. Even if you remove stock comp they still lost money.
Re: Lyft’s revenues double, losses quintuple and prospects darken
#8The problem with Lyft is that they are in a poorly understood market, in second place and burning cash at neck-breaking speed. Even if they manage to start making progress towards profitability, they might need more than that.
The reality is that ride-sharing probably needs another lustrum or so to solidify and that seems excessively long for Lyft in its current state.
Uber faces the same challenges but its way more diversified and can scale down from certain markets and verticals. Lyft on the other hand has only one market (N.America) and only one vertical (ride-sharing).
Doesn't take a genius to understand that scenario looks risky as hell. Especially when you're in a business with nominal differentiation.
Re: Lyft’s revenues double, losses quintuple and prospects darken
#9Very interesting process going on right now with Lyft & Uber both losing money and some of their drivers trying to stage protests and strikes. The drivers appear to rely on the company as their primary source of income and want more money yet at the same time the companies are operating at a loss. Were they to increase wages (as % of every ride) it stands to reason the losses would widen. If they get to wide the company goes out of business and the drivers lose their jobs. I understand that this same standard can be applied at any company but this is a gig / 'work only when you want' job so it is different.
The strikes were small so the effects on both companies were negligible. I would be curious to understand what changes the drivers (who work only when they want) expect and how they think a company running deep in the red could meet them. Not trying to pass judgement on the strikers just trying to understand.
Re: Lyft’s revenues double, losses quintuple and prospects darken
#10When Lyft was doing their road show there were a few analysts who had price targets of $45 as Lyfts fair value at IPO with an acknowledgement that the amount of shares available would double, and possibly triple when all shares were off restriction, meaning that the $45 price target was a best case and we would probably see far lower once people can sell. This is a company that has maybe 33 million shares outstanding…
> So whenever someone ask why you don't short an individual stock its always valid to answer that you believe you are right in the long term but the short term could wipe you out if you shorted.
An example here, where everyone lost out https://ftalphaville.ft.com/2018/10/31/1540962002000/The-day...