Uber Sinks to New Record Low as IPO Share Lockup Expires • Hacker News Board

Re: Uber Sinks to New Record Low as IPO Share Lockup Expires

#161

Post by braindeath » Wed, Nov 06, 2019, 5:44 PM UTC

Konnstann wrote: post #144

tzs wrote: post #124

Earlier quoted context omitted.

> We knew that their future was purely dependent on a self-driving car fleet where they could ditch drivers (and their pay) completely. I've never really understood this. Their drivers do more than just drive, don't they? They also supply the cars, and deal with maintenance of those cars. If Uber switches to a self-driving fleet and ditches human drivers, who will own the cars? If Uber owns or leases the cars, Uber w…

The maintenance cost of 1000 cars owned by one company are most likely going to be less than those of 1000 cars owned by 1000 owners, just through negotiation and bulk maintenance pricing. Uber is banking on people not switching to whatever other self-driving service comes out, due to being a household name. I don't think very many people outside of SV know what Waymo even is, everyone has taken an Uber though.

Everyone has heard of Lyft though, and in larger markets Juno. If Uber management is truly banking on brand loyalty of all things, especially based on their behavior, they are idiots. Nobody trusts Uber.

If Waymo arrives with a more cost effective solution, that’s it.

Re: Uber Sinks to New Record Low as IPO Share Lockup Expires

#162

Post by alteria » Wed, Nov 06, 2019, 5:45 PM UTC

hodder wrote: post #139

A quick reminder to everyone that buying all time lows on a stock is one of the worst equity strategies possible (statistically). Go ahead and run a backtest. On the flip side, buying stocks at all time highs, while counter intuitive, is one of the best equity strategies available (with trailing stops). Buying Uber stock here is borderline moronic until the trend turns around.

I'm curious, anywhere where I could read more about the high/low statistics?

Re: Uber Sinks to New Record Low as IPO Share Lockup Expires

#163

Post by erikpukinskis » Wed, Nov 06, 2019, 5:45 PM UTC

omarhaneef wrote: post #153

erikpukinskis wrote: post #148

Earlier quoted context omitted.

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…

I will just point out what I see as a contradiction in these statements: 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…

Basically, sort all shareholders by planned sale date. Then you can slice them into “bins”. Let’s say we want nine $5B bins. They will each have a median planned sale date.

Made up example numbers:

$0-$5B of market cap: plan to sell within 24h

$5-$10B: plan to sell within 30d

$10-$15B: plan to sell at the end of the quarter

etc...

For any given future event, it will only be implicated for some of those slices. So the cost of an event will only affect that part of today’s order book.

Re: Uber Sinks to New Record Low as IPO Share Lockup Expires

#164

Post by trhway » Wed, Nov 06, 2019, 5:46 PM UTC

naravara wrote: post #68

ProAm wrote: post #15

Is anyone really surprised? Years before the IPO we knew they were not profitable in the least. We knew VC cash was subsidizing rides. We knew that their future was purely dependent on a self-driving car fleet where they could ditch drivers (and their pay) completely. This on top of a horrible culture with pretty lousy ethics and morality. This is how this was supposed to play out and everyone here (on HN) knew that.…

>We knew that their future was purely dependent on a self-driving car fleet where they could ditch drivers (and their pay) completely. Nah. Right now their business model relies on having their labor bring their own capital. I've always seriously doubted that cutting the labor out of the equation and replacing it with capital that Uber now has to furnish and maintain was going to save all THAT much money. The numbers…

>Right now their business model relies on having their labor bring their own capital.

That is really post-Marx. It is a new economy structure enabled by technological progress, and which couldn't have existed and hasn't been predicted until it was enabled by technology and was created by Uber and the likes. In marxism, ie. in classic capitalism the capital owner extracts added value which is created by the labor applied to the capital. In the post-marxism economy the birth of which we're witnessing today Uber, by the owning of the information network, manages to extracts the added value which labor creates by applying itself to the labor's own capital. Marxism economical theory naturally postulates socialism after capitalism with the socialism being the maximum entropy of capital ownership distribution, and that is what we've observed in the last 100 years. These days with the rise of technology that got the post-Marx economy enabled the future driven by that economy isn't socialism, its the new fundamental state of society - the network.

Re: Uber Sinks to New Record Low as IPO Share Lockup Expires

#165

Post by scarface74 » Wed, Nov 06, 2019, 5:47 PM UTC

ProAm wrote: post #15

Is anyone really surprised? Years before the IPO we knew they were not profitable in the least. We knew VC cash was subsidizing rides. We knew that their future was purely dependent on a self-driving car fleet where they could ditch drivers (and their pay) completely. This on top of a horrible culture with pretty lousy ethics and morality. This is how this was supposed to play out and everyone here (on HN) knew that.…

No everyone on HN didn’t know that. Posters on HN are routinely making excuses for money losing tech companies and consider a “success” another rounding of funding at an increased valuation and being able to pawn off bad businesses to the public markets.

Re: Uber Sinks to New Record Low as IPO Share Lockup Expires

#166

Post by alteria » Wed, Nov 06, 2019, 5:48 PM UTC

AJ007 wrote: post #84

sschueller wrote: post #29

How much wealth was redistributed upwards? Who benefited from Uber other than the founders and maybe 1% of the entire business? I find it highly unethical for such a business to be able to ignore so many laws most of which protect the have nots to build a system that moves most of the profits to the haves. Then dump the broken business to IPO for fools to buy up and loose as well.

Riders and drivers who got subsidized rides and income, were probably the largest beneficiaries. Uber employees, VC partners, on the Silicon Valley side. A lot of other tech workers have benefited from the upward price pressure exerted on developer salaries not just in Silicon Valley but around the world. Who got screwed, if Uber’s valuation never recovers - late stage investors, companies doing similar things such a…

I was a big fan of the $25 referral bonuses in the early days. Probably saved a few hundred dollars overall.

Re: Uber Sinks to New Record Low as IPO Share Lockup Expires

#167

Post by RantyDave » Wed, Nov 06, 2019, 5:48 PM UTC

meekstro wrote: post #141

Uber is the ubiquitous word for modern transport between 1 to 40kms in the western world. Ubering is a verb. Thats a whole lot of mindshare and Uber is a whole lot better than a taxi. Future demand for taxis will go up. Uber is the verb for the software layer in the middle of getting from a to b. Nobody can innovate enough in the space to displace Uber’s brand lead. Running a server is cheaper than paying a dispatche…

Hoovering is a verb, it didn't help them.

Edit: Xeroxing.

Re: Uber Sinks to New Record Low as IPO Share Lockup Expires

#168

Post by RantyDave » Wed, Nov 06, 2019, 5:50 PM UTC

dreamcompiler wrote: post #53

dangxiaopin wrote: post #4

I am long on Uber: taxis are dead, it will not go anywhere. The only problem is that the board made a strategic mistake that felt good short term. They tried to retain users by pushing the founder out, and hiring a diversity CEO. This failed long term as any populist board move does. But they still have a chance to have their NeXT moment and bring Travis back.

They don't need Travis. They need an adult in charge who will shed about 80% of their payroll. Managing a cloud-based mobile logistics service for taxis shouldn't require 22,000 people.

I think they have kinda giant customer service requirements. They must get a lot of complaints in a day.

Re: Uber Sinks to New Record Low as IPO Share Lockup Expires

#169

Post by cactus2093 » Wed, Nov 06, 2019, 5:50 PM UTC

habosa wrote: post #70

I always look for a discussion of "how much money does Uber need to make to cover all the fundraising" and I never see anyone doing that analysis. Instead it's just "they're not profitable" or "they turned a profit". Uber took a few billion dollars of investor capital over the last decade. Let's assume we live in the world from the textbooks where the value of Ubers stock is actually the net present value of all its…

Part of the misunderstanding, at least as I understand it, is that for a growing company the vast majority of the expected earnings come a very long time in the future.

Peter Thiel talks about this for Paypal in Zero to One, IIRC in 2001 their projections showed that like 75% or more of the net present value would come in 2011 and beyond.

I don't actually know how you make a model like that, clearly you need to assume a maximum size and a decline at some point in the future or else you would expect infinite future revenue? But obviously people are doing that, amonth other types of models for Uber and deciding it's still worth $45 Billion as of today. If not the stock price wouldn't be that high. I think the reason you don't see it is just that it's more advanced than what a regular journalist is going to do, and I assume you're not paying for the right specialist publications to have access to that level of reports.

If you still think it's completely crazy, then what are you waiting for get out there and short the stock, there's free money to be made!

Re: Uber Sinks to New Record Low as IPO Share Lockup Expires

#170

Post by dragontamer » Wed, Nov 06, 2019, 5:51 PM UTC

cik wrote: post #160

dragontamer wrote: post #101

Earlier quoted context omitted.

> 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.

Of course there is. You can short, it's pretty profitable.

You can only short if you can find someone willing to lend you shares. Shorts can "run out of shares to borrow" in practice. Similarly, you can buy put-options (or sell call options) on the shares, but only if you can find a counterparty to accept the "other side" (that is, a short-put or a long-call) of your bet.

Run out of counterparties, and it becomes impossible to trade. Reality becomes evident at times like this when volume is way, way, way higher than anybody expects.

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I admit that I don't know what happened today with Uber, but we can't just assume "invisible hand / market is always perfectly efficient". Reality simply doesn't work like that.