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Lyft’s revenues double, losses quintuple and prospects darken

economist.com

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Re: Lyft’s revenues double, losses quintuple and prospects darken

#131

Post by jeromegv »

notahacker wrote: post #28
wsc981 wrote: post #18

Earlier quoted context omitted.

Makes one wonder how Grab compares, which is popular in Asia. I believe most Grab drivers in Thailand most likely earn an above average wage. For example a short drive from Chiang Mai central bus station to Chiang Mai airport cost me 208 Baht (~7 USD) while the average Thai daily wage is probably around 300 Baht. I also paid a tip (240 Baht total). Of course Grab gets a share of the income, but I’d guess it’s less th…

Presuambly you have to buy and maintain a half decent car to enter that market, which is difficult if you have the financial resources of someone earning 300 baht a day. And with rather less capital outlay you can also earn 200 baht from short tuk tuk rides for tourists...

What's common in Philippines is for higher middle class to buy a vehicle, and pay a driver to drive it for Grab. So the capital of buying the car is not done by the driver, and the drivers gets a lot less than what you pay.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#132

Post by chollida1 »

HoyaSaxa wrote: post #95
chollida1 wrote: post #4

When 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…

Shorts very rarely actually get closed out by a prime broker (at least for institutional investors). The stock borrow world is very inefficient, but when a forced buy is on the line the PB will almost always find more supply. Especially with a presumably large retail long base, the retail brokers like TDAmeritrade will literally start calling up long positions to offer to pay for the rehypothecation rights. Others li…

> Shorts very rarely actually get closed out by a prime broker (at least for institutional investors).

This is technically true, but far away from what actually happens. What normally happens is that when borrow gets pulled the prime will notify the firm that they have to close the position for T+2 settlement.

There is a 3pm buy in window but you are correct that its not often that the prime is forced to do it because they make it clear to the firm that at 3pm they will send a market order for the required amount, this will almost always result in the firm buying back the position before this comes to pass.

Occasionally the prime will find other borrow but often that borrow has multiple issues that make it unsuited for holding a short position for more than a day or two.

1) unstable and could get pulled at any moment.

2) rates are much higher than what the firm was currently paying

So theoretically you are correct but practically speaking not so much:) The firm will usually just close out a position at this point unless they have a firm conviction that they can make a profit at the increased borrow rate and ride out the moentary pop.

And with borrow rates that can did approach 60% for lyft you are betting that Lyft will go down more than 60% inside of one year.

Possible but not very likely, you can be directional correct but still lose due to your borrow fees.

Retail doesn't help much for larger firms with borrow as the market isn't near as large as the institutional market. Though maybe you just are used to trading in smaller share quantities than I am:)

Re: Lyft’s revenues double, losses quintuple and prospects darken

#133

Post by lukewrites »

misiti3780 wrote: post #89
chollida1 wrote: post #4

When 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…

exercise their green shoe option. ?

I had to Google it:

> A greenshoe option is an over-allotment option. In the context of an initial public offering (IPO), it is a provision in an underwriting agreement that grants the underwriter the right to sell investors more shares than initially planned by the issuer if the demand for a security issue proves higher than expected.

https://www.investopedia.com/terms/g/greenshoe.asp

Re: Lyft’s revenues double, losses quintuple and prospects darken

#134

Post by gradys »

luckydata wrote: post #120
GCA10 wrote: post #87

Earlier quoted context omitted.

Right now, Uber keeps 22 cents on each dollar paid by passengers, as its fee for creating the app, keeping it working, etc. That's cheap relative to the iTunes store, which keeps 30%. It's preposterous compared to the 3% that real-estate agents get for buying or selling a home. We really don't know what the "fair" rate is for running a ride-hailing business. We know what's been collected to date in a venture-funded d…

RE agents get a lot more than that.

My dad is a real estate agent (primarily for residential properties), and at least when I was growing up, it was 3% each for the buyer and seller's agent.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#135

Post by JMTQp8lwXL »

adventured wrote: post #54
swarnie_ wrote: post #31

Earlier quoted context omitted.

As soon as one of them increase prices to generate profit ill just move on to the next ride sharing app, then the next, then the next. You'd need a price fixing scheme worthy of British Airways make this work.

It doesn't actually work that way in reality. If it did, there would already be another massive Uber undercutting Uber in eg the US market and raising $10+ billion in VC money to do it. Because hey, a $75 billion valuation is sitting right there, so it's really easy: just put $10 or $20 billion into the company, undercut Uber, IPO, easy return. Everbody can do it, just add $20 billion. What's actually the case, is th…

The company that delivers fully autonomous vehicles would have no trouble securing funding to not have to operate within Uber's walled garden and give Uber a 22% cut of profits, and make their own app. Remember, when the independent contractors go away, you don't need offices in every city to onboard drivers, you don't need a big legal team to fight the ongoing "are they contractors or employees" debate, etc.

In other words, the company that delivers autonomous won't need $10B to make a cloned Uber app. Since the driver is the biggest cost for Uber, riders will gleefully switch to the clone at even cheaper prices.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#136

Post by erikpukinskis »

strikelaserclaw wrote: post #32
warp_factor wrote: post #27

Earlier quoted context omitted.

Analysts predict where the stock is going in the short term based on "sentiments" and "emotion". I wouldn't bet anything on them.

if Analysts knew so much they would be rich instead of providing advice, which I've found to be hit or miss, to other people.

They do know a lot. But the work the analysts are doing is price of entry stuff.

You don't make money on Wall Street by "knowing a lot" you make money by knowing one thing that one person opposite you doesn't.

That means you have to know a lot of things that won't make you rich, just to prevent becoming poor.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#137

Post by vowelless »

baxtr wrote: post #100
chollida1 wrote: post #4

When 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…

For me it’s really difficult to comprehend what you describe. I think it’s super interesting though. Is there any way you could tell the story for a layman?

Lyft seems to have a lot of shorting. People are heavily betting against it. They expect its price to drop.

However, while it may be true that in the long term lyft will loose value, something weird can happen in the short term:

Shorting requires borrowing shares. You pay a fee, borrow the share. If it looses value you make money. But if it gains value, and you are asked to return those shares back, you can loose a lot of money. Also, the act of asking for those shares back could raise the value, creating a negative feedback look. Disastrous for the short seller.

Why might we see lots of shorts being asked to return the shares back? Due to the large amount of shorting and the bank wanting those shares for other purposes.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#138

Post by jjeaff »

nabla9 wrote: post #112

Once the ride-sharing matures, 5-10 years from now, Uber, Lyft and new competitors are not going to take 20 to 25 percent per cent of drivers’ fare. If I had to guess, 10 years from now they take just 1-3% per ride and maybe ask few $100s upfront for each registered driver to cover fixed cost of handling new drivers. These valuation include hopes for fully autonomous cars and the fear of missing out.

It won't get that low. That wouldn't cover cc processing.

They also need to cover insurance and several other costs. But I could definitely see it settling around 10-15%

Re: Lyft’s revenues double, losses quintuple and prospects darken

#139

Post by jkubicek »

razwall wrote: post #103
jkubicek wrote: post #81

Earlier quoted context omitted.

Yeah, I've always considered it a lottery ticket, but I'd love to get a sense of whether I'm holding a $10k or $10mm lottery ticket. FWIW, I've done the math based on my percentage ownership, expected valuations, timeline to IPO, etc. The big unknown for me is dilution. I don't yet have a good sense of how much dilution I should expect as we move through rounds of funding into an IPO.

Dilution is a red herring. It doesn't change the value of your shares (theoretically). What will matter is how the company spends the funds that it raises, and whether it does so in a way that generates a positive or negative return on investment.

Here's how I'm thinking about it with example numbers: I own 0.1% of the company. Based on our market and performance and valuation of peers I expect us to be worth $10b.

With no dilution my stock is worth $10mm (minus taxes, strike price, etc.)

With 10% dilution per round and 4 more funding rounds, it's now worth $6.5mm.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#140

Post by [deleted] »

wonderwonder wrote: post #9

Very 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 comp…

[deleted]
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