151–160 of 213 posts
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While yours is an economics textbook answer, any trader will tell you, "it doesn't matter until it matters."
Yes. A lot of discussion here seems to be very academic vs how things play out.
From Q3 results, it sounded like the company was profitable just on ride-sharing itself and was losing a ton of money on eats + cargo + autonomous vehicles R&D. I wonder what a fair valuation would be for just the ride-sharing business if they were to spin off / shut down every other part of their business and essentially become Lyft.
I wonder how much cost offloading was done to make ridesharing look profitable and everything look like a loss. Uber needs a positive narrative of some kind
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By your logic, it should have been priced in at IPO, since we knew back then that it would happen. However, note that back then we also didn't know what else was going to happen. We didn't know if earnings would go up or down, or a lawsuit would emerge etc. After earnings (a few days ago), we had a "purer" expression of the effect of the lockup expiry. In other words, we had the information but there was also a lot o…
All timescales happen simultaneously on the market. So there is a slice of the market that’s priced how you say: IPO plus many years. There’s another slice that’s priced on the day’s expectations, another slice on the quarter, etc. How big each slice is varies per company. But OP is correct that for all slices that contain yesterday, yesterday is priced in. Which includes all slices that were in the order book yester…
If getting out of the stock after the IPO and before the lockup expiry allows you to "escape" the effect of the lockup expiry, then you are implicitly saying that the expiry was not priced in.
I don't know what it means for a "slice" of the market to be priced a certain way. Uber has a clearing price which reflects all the opinions at any point in time. What is a slice?
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Uber is the ultimate middleman company. It would only work if people bought their own self driving cars and rented them out to Uber to make some extra money.
And it's difficult to see how those ad hoc rentals can compete with a fleet management company that has economies of scale and optimizes for short-term rental. Car depreciation is more mileage-based than time-based so it's reasonable to assume that the rates people would get would tend to reach a point where they were pretty close to the cost--with perhaps an exception for times when there's extraordinary demand.
I think Lyft and Uber hurt public transit. There has gotta be a better way to make American cities more livable and accessible without adding additional car traffic. Buses, denser house, better urban planning, metro rail and subway additions are the way we need to go like Asia and Europe. Uber and Lyft are not doing well in Europe and Asia because leaders realize they make traffic worse and are trying to focus on zon…
The reality is that public transit hurts public transit way way more than anything else, just like taxis not only destroyed themselves, but they alone made Uber/Lyft even possible. Just like without taxis being an utterly miserable experience in most cases (which clearly has now been normalized in U/L to some degree) made people flock to U/L even with efforts like Curb (and whatever they were called before that) in addition to some other efforts to organize taxis in an app; so is and did public transport sabotage itself too.
People who advocate for public transport (and I must assume that includes you) tend to not at all understand the true costs and issues with public transport beyond the obvious ones like subways/trams being stuck on rigid lines or busses that are limited in their route. What those people do not take into account is even just the full financial cost of operations, not even to mention future obligations due to unfunded liabilities/benefits for utterly unproductive/lazy government employees, and all the accompanying authoritarian/tyrannical gaslighting propaganda that comes with it, e.g., "how dare you point out or note the crimes and violence on BART. You are a horrible person for not subjecting yourself to it". But reality is that, e.g., the NYC subway system is HEAVILY subsidized, which makes it so "cheap", just like all the European public transit is even more subsidized and makes it even "cheaper".
Just for example because I was looking at the figures recently, the WashDC Metro system only receives half its operational budget from fares, and the other half is drained from surrounding counties and the city of DC. And that is at a cost of commuting to and from work into and out of the city of about $7.5 every single day, partially due to recent fare increases. That's ~$2,000 per year to commute to work when one is to believe that being jammed into busses/subways should produce some kind of savings over owning and operating a car, which would clearly not cost $2,000 in costs for commuting per year unless you are talking about a mid sized luxury vehicle.
You are wildly mistaken, at least regarding Europe, why U/L are doing poorly. They are doing poorly there because the people still care about maintaining a line against the very "disruptive" types that SV and YC for that matter is full of. People in Europe at least for the time being still have a shared common bond to maintain the line against pure capitalists that have demoralized and broken through that line in the USA in particular, where no such bonds of unity and common interest exist anymore to hold the line against the abuses and excesses of the pure capitalists like basically all the tech companies are. Uber is, ironically successful in the USA specifically through abuse, fraud, manipulation, deception, plunder, and degeneracy. Like I said, at least for the time being, that defensive wall has not yet been broken trough yet in Europe, even though it surely is coming, with the invasion of the same kind of foreign low wage serf labor that fuels U/L.
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If Uber counts as a successful company by SV standards, that's a pretty strong condemnation of SV standards.
If it’s worth one third of its current market cap it’s worth $15B. For a company that’s ten years old that’s incredible.
That's less growth than Comcast has had over the same period. Which most would not consider a dynamic incredible stock.
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This reads like the usual Uber criticism and doesn't touch on the lockup. The market knew the lockup was ending, so it should have been priced in. Dropping when the lockup ends should mean that markets underestimated how many insiders wanted to cash out, and employee sentiment is worse than market sentiment.
I dunno, but I wouldn't read too much about employee sentiment into this. Say you have $150k in savings and $x million in Uber stock. Any competent financial advisor is going to get you to diversify out of Uber. You'll miss upside, but prevent that $x million from potentially going to zero based on the actions of just one company. Also... goodbye sf housing market :(
That ship sailed a while ago, no?
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Sure, but the same could be said of Tesla. Horrible employer, constant exec churn, unbelievable cash burn, what appears to be structural losses.... But Tesla still has a 56B mcap today. Uber is 46B. These VC/equity issue cash furnaces can go on longer than most can fathom if a subset of investors believe in the long term vision.
Do you really see structural losses when you look at the graph of Tesla’s P/L? I don’t understand how you could interpret the charts that way. That seems like a talking point people parrot who have never looked at the numbers. I mean, this is Tesla and Uber on the same timescale: https://imgur.com/gallery/NOsh4b1 Certainly one of those companies has structural losses.
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Agreed, I came to post the same thing. The lockup period is a known event (nothing to be suprised about). The market already adjusted the stock price to reflect the anticipated insider cash out after the lock up. Any rise or fall in the price at the specific time the lockup ends is because the reality is different than what the market anticpated.
Volume is extremely important. The 90-day average volume for Uber is ~10-million shares per day. Lets pretend you knew that Uber was going to drop today (last week). How many shares do you sell short? That 10-million average is ALL market trades, buying, selling, etc. etc. If 10-million shares were short-sold, it'd take a full day to cover all of those shares (based on average volume). There's only so much trading ac…
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This reads like the usual Uber criticism and doesn't touch on the lockup. The market knew the lockup was ending, so it should have been priced in. Dropping when the lockup ends should mean that markets underestimated how many insiders wanted to cash out, and employee sentiment is worse than market sentiment.
> Dropping when the lockup ends should mean that markets underestimated how many insiders wanted to cash out, and employee sentiment is worse than market sentiment. Uber's volume is 700% compared to last week. With volume-swings like that, there really isn't much you can do.