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Uber opens at $42 per share

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Re: Uber opens at $42 per share

#151

Post by acchow »

throwaway66666 wrote: post #82

Unprofitable companies are the only ones that really benefit from IPOs. An IPO is basically a way for the company to raise money, but tis time straight from the public. Usually when it gets harder and harder for them to attract private investors. The IPO listing basically guarantees that they won't take the public's billions and run. Successful companies with perfect cash flows (think of Github, Valve, IKEA) always t…

False.

Silicon Valley is obsessed with them because it's the only place where hundreds or thousands of employees are given significant equity; many of them have $100k - $1 million in vested equity 1-3 years into the job. You don't want that frozen in a private company indefinitely. You want liquidity to use it and to diversify your holdings. This doesn't mean you think the company will fail and you just want to "take the money and run".

Re: Uber opens at $42 per share

#152

Post by nradov »

hunter23 wrote: post #122
throwaway66666 wrote: post #82

Unprofitable companies are the only ones that really benefit from IPOs. An IPO is basically a way for the company to raise money, but tis time straight from the public. Usually when it gets harder and harder for them to attract private investors. The IPO listing basically guarantees that they won't take the public's billions and run. Successful companies with perfect cash flows (think of Github, Valve, IKEA) always t…

This is incorrect. There are lots of cases where profitable companies want to IPO. Specifically the public markets are where you go when you need to raise money at significant levels. Nowadays this happens less often as their are bigger and bigger private investors (so you can raise billions in private markets). However there is still a point at which you may need to go public for fundraising. You are making a mistak…

Back in the days before the first Internet boom, most major stock exchanges required a company to be profitable for several quarters before an IPO.

Re: Uber opens at $42 per share

#153

Post by feanaro »

dragontamer wrote: post #73
kyleblarson wrote: post #43

Earlier quoted context omitted.

"To cover a short position" implies that you have a short position you are buying to cover. You likely mean "to put on a short position"

> "to put on a short position" Put is still a bad word because it has a connotation for options trading. (put options vs call options). Maybe "to bet on a short position" is the best phrasing? "Put", "Call", and "Cover" all have precise meanings in the financial word. "Bet" is ambiguous enough that its kinda clear in this case.

To open a short position. Or simply "to short".

Re: Uber opens at $42 per share

#154

Post by shereadsthenews »

aetherson wrote: post #148
shereadsthenews wrote: post #119

Earlier quoted context omitted.

It's certainly disappointing for people who have been underpaid compared to industry salaries for the last several years based on their belief that their shares were worth more.

Does Uber pay low salaries? This is the first I've heard of it.

The base salaries are comparable but the share comp, which is generally close to half of comp, was based on valuations that didn't pan out. Now that it's been marked to market it doesn't look great. Keep in mind that other tech companies have doubled their share price or better in the last four years.

Re: Uber opens at $42 per share

#155

Post by pcl »

hunter23 wrote: post #122
throwaway66666 wrote: post #82

Unprofitable companies are the only ones that really benefit from IPOs. An IPO is basically a way for the company to raise money, but tis time straight from the public. Usually when it gets harder and harder for them to attract private investors. The IPO listing basically guarantees that they won't take the public's billions and run. Successful companies with perfect cash flows (think of Github, Valve, IKEA) always t…

This is incorrect. There are lots of cases where profitable companies want to IPO. Specifically the public markets are where you go when you need to raise money at significant levels. Nowadays this happens less often as their are bigger and bigger private investors (so you can raise billions in private markets). However there is still a point at which you may need to go public for fundraising. You are making a mistak…

> Nowadays this happens less often as there are bigger and bigger private investors (so you can raise billions in private markets)

Arguably, the reason IPOs happen less now than 20 years ago is because of the increase in regulatory requirements (particularly in the US), and the increase in available funding is a result of that.

Re: Uber opens at $42 per share

#156

Post by SeanAppleby »

fullshark wrote: post #39
dymk wrote: post #26

Earlier quoted context omitted.

In the 1997, Amazon's proposition of "Online retailer" was also pretty far fetched. It wasn't obvious that their model was going to make them one of the largest retailers in the world.

Online retailers wasn't far-fetched at all. It wasn't obvious they were going to become the everything store and dominate the market, but it wasn't like people were perplexed by a business plan of selling books online and sending them to consumers. If people are perplexed by uber today it's because the unit economics look horrible, and it doesn't seem like they will improve without a major technological advance. Edit…

Even with a major technical advance it's not obvious that they'll have a moat to defend their margins. All of the ride sharing platforms might just end up competing to the death on price without anything else to differentiate on, and in that future I'd imagine the person with the cheapest supply chain will win, and I don't see why that would be Uber.

Re: Uber opens at $42 per share

#157

Post by gmmeyer »

usrusr wrote: post #127
eigenvalue wrote: post #112

Earlier quoted context omitted.

They do both. It's relatively rare for a company to IPO without raising fresh capital for the company. There are however often "secondary" share sales where only "selling shareholders" (rather than the company) receive the proceeds.

> It's relatively rare for a company to IPO without raising fresh capital for the company. An IPO without raising new capital would make it more difficult to answer what every buyer should ask: "why are they so eager to sell?" It's a variation of plausible deniability.

It's what Spotify did, I think it's a decent question but it also allows for liquidity, especially since it's such a big part of comp it's not unreasonable to list

Re: Uber opens at $42 per share

#158

Post by moorhosj »

throwaway66666 wrote: post #82

Unprofitable companies are the only ones that really benefit from IPOs. An IPO is basically a way for the company to raise money, but tis time straight from the public. Usually when it gets harder and harder for them to attract private investors. The IPO listing basically guarantees that they won't take the public's billions and run. Successful companies with perfect cash flows (think of Github, Valve, IKEA) always t…

One only needs to look at Levi’s IPO in March to prove this theory wrong.

Re: Uber opens at $42 per share

#159

Post by buzzdenver »

eigenvalue wrote: post #112
hayksaakian wrote: post #107

Earlier quoted context omitted.

Do IPOs usually generate new funding for the IPO company? IPOs seem serve as an `exit` for private investors who bought in while the company was private?

They do both. It's relatively rare for a company to IPO without raising fresh capital for the company. There are however often "secondary" share sales where only "selling shareholders" (rather than the company) receive the proceeds.

An IPO with out raising fresh capital is called a Direct Listing. Slack did it not long ago.

Re: Uber opens at $42 per share

#160

Post by carlsborg »

chollida1 wrote: post #3

Some notes from watching Uber open: - if it closes below $45(its IPO price) it will be the first time since 2008 that the happened for a major IPO - TD Ameritrade executed more orders in the first 10 minutes of trading than they did for the first 2.5 hours with Lyft. - Uber is 9% of all trading at TD Ameritrade, retail loves this stock, - market is down today, which isn't helping Uber but its probably not much of a f…

Facebook was at ~$44 on the day it IPOed, and proceeded to fall over the next month to about $19. Today its at $187.
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