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Uber opens at $42 per share

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Re: Uber opens at $42 per share

#431

Post by windexh8er »

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…

> Personal thought. It may be tough for employee's to not see this pop to say $65-$70 but in the long run its almost certainly better to open flat than to pull a "lyft" and get a first day pop that you price your options at in your head and to then have to cut that price by 40% before you get a chance to sell.

The reality is Uber isn't worth $65-70 today given long term risk. As many others have pointed out opex is well over 150% of revenue. Now that could be fine if the long strategy can reel that in over the next decade. I don't see any of that other than a smattering of "bets" (Uber Eats, scooters, etc). I could very well be wrong but I intentionally didn't buy given what all tech IPOs have done lately. As a consumer who doesn't have the option to get in early I'm at the mercy of the large firms who can take profit off large positions which snowball bringing the valuation back to reality. I think we see more of these "backfires" as people are sick of propping up large financials and more caution around waiting for stocks to settle. If Uber employees expected it to pop north of $50 they're going to be waiting a while. There's no reason to buy now, risk is high that a few large trades sinks the stock into mid $30s or lower territory.

Business Insider had a nice graph that put the valuation into context: https://markets.businessinsider.com/news/stocks/uber-technol...

Re: Uber opens at $42 per share

#432

Post by ric2b »

harryh wrote: post #425
matt4077 wrote: post #412

Earlier quoted context omitted.

If only there were some sort of large, liquid, well-regulated market offering opportunities to bet on the prospects of publicly traded companies.

You can't really bet on "it'll be bankrupt in < 2 years" in the public market.

Can't you short it for more than 2.5 years or buy puts that expire 2.5 years from now?

Re: Uber opens at $42 per share

#434

Post by conanbatt »

what_ever wrote: post #359
conanbatt wrote: post #303

Earlier quoted context omitted.

It would be better for you to collect stock on a company like google at 0$ salary, and just pay long term capital gains when you sell than salary. Makes a huge difference long term, as one is filled with payroll taxes and high rates, and the other is 15%.

That doesn't make sense. The stock grant will still be considered normal income to you and taxed as the salary is taxed. Any difference in the stock price after it vests and you sell will be either short term or long term capital gain. So if you consider getting all salary in cash and then buying GOOG (or any other stock) with it, you come off only a month or two late on the period for which you are holding the stock…

Of course, you want all your stock gains to fall under long term capital gain. Google already has the market price in, but all startups don't.

If you make 200k a year for 10 years, vs get no salary for a startup for 10 years and then its sold out for 2 million dollars, they are completely different tax conditions.

Im not an expert or have been through this, but if you sell 2 million dollars at 15% long term rate vs the 35~% + medicare of salary, the difference will be huge.

Re: Uber opens at $42 per share

#435

Post by _bxg1 »

SOLAR_FIELDS wrote: post #322
criddell wrote: post #276

Earlier quoted context omitted.

The answer isn't price (IMHO). It's the quality of service. I'm mostly talking about better cars, friendlier drivers, and rides that show up when they say they will. I haven't used a cab app. Are the taxi apps similar to Uber and Lyft's where it identifies the car and driver and you can track the location of that car on a map? Do drivers and passengers rate each other?

Answer: it depends. When I lived in Malmö they had Taxa97 which was basically the same as Uber/Lyft. You can schedule rides, rate drivers, map view, and see the price of the ride before you take it. same with the taxi apps in Denmark. Other places have not as nice taxi apps. But in general taxis having to compete has generally brought them in line with U/L, at least in most of Europe. The only major difference with t…

Yet at the same time the drivers are fingerprinted and background-checked. I'd say that's a good tradeoff.

Re: Uber opens at $42 per share

#436

Post by hn_throwaway_99 »

Retric wrote: post #336
hn_throwaway_99 wrote: post #209

Earlier quoted context omitted.

> Historically, that’s not uncommon. Really? I was under the impression that closing below your IPO price is quite rare indeed. Do you have other data? Edit: actually, just saw a NYTimes article with info that it is indeed rare: Since 2000, only 18 companies valued at more than $1 billion and listing on American exchanges have opened below their I.P.O. price. On average, tech stocks have jumped — or “popped,” in Wall…

I would call 18 common, relative to the number of recent IPO’s over 1 Billion dollars. It’s definitely not the majority, but it’s common enough to make leverage extremely risky.

You have an odd definition of "common". That's 18 over a total of nearly 20 years. The billion threshold is for total company valuation, which at least recently is most companies listed, not amount raised.

Re: Uber opens at $42 per share

#438

Post by computerex »

disgruntledphd2 wrote: post #409
computerex wrote: post #217

Earlier quoted context omitted.

> Aside from brand recognition, what does Uber have that the others don't? Brand recognition is no small thing. Hyper growth is what a lot of companies are going for, because that's the model that lead to amazon dominating the world. Ubering being a verb is very valuable.

Hypergrowth from re-investing profits is very different from hypergrowth from kind investors. One of those leads to massive profit (eventually), and we'll see what happens with Uber.

Disagree. Everything is a trade off. You can either choose to aggressively grow at the expensive of burning cash or you can try to focus on becoming profitable. Many companies bet that the growth story is better than early profitability. Market seems to agree. Remember, even Amazon loses money on almost everything and their cash cow is AWS.

Re: Uber opens at $42 per share

#439

Post by foobarian »

sfifs wrote: post #402
foobarian wrote: post #378

Earlier quoted context omitted.

> Also advertisement has huge margins with not much cost from Facebook's pov but ride sharing logistics is completely different with very little margin where the driver needs to get paid Why is this? In both cases it seems the cost is paying a bunch of servers and engineers to run a website. So why is Facebook seemingly more efficient?

Nope. Market share and pricing power in digital advertising comes from user base and targeting capability. As an advertiser, I can reach most of the population in many country through FB/IG and YouTube. Their targeting data is also pretty good. So they claim a lion's share of the market. Also inventory expands as userbase expands and the userbase doesn't really have other options with similar network effects. Uber on…

So basically advertising is less constrained on the upside than transportation. The whole bit about 'they have to pay their drivers' is a red herring - the real constraint is that the price the riders are willing to pay is more constrained / lower than what advertisers are per user.

Re: Uber opens at $42 per share

#440

Post by dasil003 »

imajoo wrote: post #397
nchie wrote: post #365

Earlier quoted context omitted.

But did they do that before Uber?

Not OP, but if they weren't doing it before, and just copied Uber, doesn't that show how weak their moat is? The same could happen with autonomous vehicles as well then.

The topic is revolutionary UX not moats.
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