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

#141

Post by meekstro » Wed, Nov 06, 2019, 5:14 PM UTC

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 dispatcher.

Like Coca cola there is an uber on every street corner of the western world and customers love uber. Uber doesn’t need to buy syrup or warehousing.

Sounds like an opportunity to buy a profitable brand that successfully invested in becoming a verb.

I wonder what would be the minimum support cost if you kept the brand going and outsourced the server tech support. And what would be the minimum number of developers required to update the app for drones and air taxis.

I reckon 100 x 250k development 2000 x 100k server support 10 x 200k design 1000 x 100k driver/customer liasion Servers don’t know say 10,000 x .5k

Equals about 400m a year in operating costs.

If they are serving more than 400m rides a year and growing that should be a buy because every ride past 400m is pure profit and the only depreciation is their servers which is a minuscule percentage of their costs.

I’m going to read up on this company. It’s lower risk than Tesla because it only requires labour and the demand for getting from a to b is only going to increase. Lyft will never be a verb. Its definitely worth further investigation. I hope the shares sink further.

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

#142

Post by sharkmerry » Wed, Nov 06, 2019, 5:15 PM UTC

elliekelly wrote: post #104

pbreit wrote: post #23

Earlier quoted context omitted.

The core business is very profitable. Loss-making is happening in their less mature product categories and expansion efforts.

Take a look at their most recent 10-Q[1] where you'll notice their claim of profitability relies on the completely made up (and non-GAAP) metric of "Rides Adjusted EBITDA". From page 36 of the filing ("Segment adjusted EBITDA" collectively references their adjusted EBITDA metrics for rides, eats, and freight): > Segment adjusted EBITDA is defined as revenue less the following expenses: cost of revenue, operations and…

I believe groupon did similar accounting tricks of not using GAAP metrics and everybody ate it up too

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

#143

Post by papito » Wed, Nov 06, 2019, 5:16 PM UTC

bloomer wrote: post #95

Ididntdothis wrote: post #73

Earlier quoted context omitted.

”self-driving car fleet ” Uber has zero competence in fleet management. Everything they do is to avoid investing in a fleet.i would argue that rental car companies or car dealers are positioned much better.

Weird that this is being downvoted because Uber has shown no interest in acquiring and managing assets (self-driving cars or even their own cars) which is a completely different business than being a marketer for independent taxis. If self-driving cars become a business it seems like rental car companies would be ideally positioned to take advantage of them.

Once a VC-funded tech company starts maintaining inventory, actually assets, then things get real pretty quick. The only reason these companies become unicorns is because they don't have the overhead of owning stuff. Then you are just any other company.

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

#144

Post by Konnstann » Wed, Nov 06, 2019, 5:17 PM UTC

tzs wrote: post #124

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. 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.

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

#145

Post by lm28469 » Wed, Nov 06, 2019, 5:18 PM UTC

buboard wrote: post #116

lm28469 wrote: post #93

Earlier quoted context omitted.

What about buying stocks in companies trying to have a positive impact on the world and not managed by megalomaniacs ?

Like?

Any company supporting what you truly believe is good for this world instead of dumping $$$ with the sole purpose of making $$$ no matter the external costs. Sustainability, energy, education, medicine, the small business at the corner of your street &c. the world isn't running out of good companies.

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

#146

Post by omarhaneef » Wed, Nov 06, 2019, 5:25 PM UTC

ganitarashid wrote: post #97

omarhaneef wrote: post #19

So I think people may be misinterpreting this drop: lock up expired today, so the sales today -- throughout the day -- are a result of the lock up expiry. This pre-market drop is the result of people anticipating the drop and selling before the market opens. It is also, partly, driven by the disappointing earnings from 3 days ago, and indeed the drops over the last few days have been about as large. For what its wort…

Slightly up from the open but still down majorly from yesterday. Are you in marketing?

The purpose of that distinction is to tease apart the effects of the lock up expiring from other effects (anticipation of the lockup expiry and after effects of the earnings call).

It is not to render some verdict on the one true value of Uber.

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

#147

Post by streetcat1 » Wed, Nov 06, 2019, 5:26 PM UTC

omarhaneef wrote: post #66

streetcat1 wrote: post #46

Earlier quoted context omitted.

The post lockup sale was already "priced" into the share price a month ago (or even before). The market react only to NEW information. In general, it is impossible to know what is priced in or not.

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…

You are correct. Everything is priced in, alas, with probability of occurrence. If you look at option pricing the probablity is part of Black & Scholes formula.

Also, the market did not know about earning,this is a surprise information (or it should be).

I would also argue that the market priced in new information within milliseconds.

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

#148

Post by erikpukinskis » Wed, Nov 06, 2019, 5:28 PM UTC

omarhaneef wrote: post #66

streetcat1 wrote: post #46

Earlier quoted context omitted.

The post lockup sale was already "priced" into the share price a month ago (or even before). The market react only to NEW information. In general, it is impossible to know what is priced in or not.

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 yesterday.

Some people did get out between IPO and yesterday, and they would not have priced yesterday at IPO.

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

#149

Post by streetcat1 » Wed, Nov 06, 2019, 5:29 PM UTC

semiotagonal wrote: post #67

streetcat1 wrote: post #46

Earlier quoted context omitted.

The post lockup sale was already "priced" into the share price a month ago (or even before). The market react only to NEW information. In general, it is impossible to know what is priced in or not.

I reckon that's generally true, but I'm trying to think through if it applies when composition of "the market" changes, e.g. when people that couldn't participate before (in lockup period) can participate now. Is it still the case?

No, the market prices are not decided by a group of uber employees selling or buying.

In general, trading is done between hundreds of hedge funds, each with at least 10B in assets. Uber employee trading is meaningless.

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

#150

Post by streetcat1 » Wed, Nov 06, 2019, 5:31 PM UTC

erikpukinskis wrote: post #148

omarhaneef wrote: post #66

Earlier quoted context omitted.

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…

All timescales do happen, however, the actual share price (the last trade) is decided by the very very short term order book, which is very sensitive to new information.