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Facebook's IPO was also off to a rather rough start[1], so I am not putting much stock into what happens in a single day. I have not purchased or plan to purchase any Uber stock, I just think it's important to have perspective on this event. https://en.wikipedia.org/wiki/Initial_public_offering_of_Fac...
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So basically you're saying that you should use laws to send them out of business instead of basic economics? Why wouldn't you pass a tax on search and social media companies that sets the minimum wage of engineers to 1 million dollars a year if you want to break up twitter, google, and facebook? That's logical equivalancy.
Basic economics have failed when a company that has existed for over a decade without any ability to turn a profit IPOs. And indeed, I am all for using laws against abusive corporate entities. I am also for using data protection laws (and not minimum wage regulations) to break the ability of social media companies to survive (or at the very least, rein them in). Have to use the right tool for a job.
The markets are irrational sometimes. Basic economics assume rational behaviour, which is something that cannot be assumed.
> And indeed, I am all for using laws against abusive corporate entities.
I don't think you can pass laws against companies specifically. First, define what you mean by abusive. Uber/Lyft doesn't have a gun against your head to force you to drive.
You have to pass them against specific behaviours. Also, for ridesharing companies, what does "per hour mean"? Time you spent logged in, adding time you spent stuck in traffic getting to the customer, or time you are actively moving towards your destination after pickup? There are obviously unintended side effects to give in to knee jerk reactions to something that you feel is wrong. Would Uber/Lyft drivers be happy if the companies implode and they're stuck with a bunch of worthless predatory leases on cars? Or the fact that part time drivers no longer have that option to at least make some money?
They could follow the Amazon model to profits, get big enough to dominate the niche, but they at least need a profit engine, that would give them cash flow. It would let the company grow without having to continuously have to raise money and keep the stock price stable.
Look for the company to continuously raise money or to reduce service. None is good for the stock's future price.
Who buys stock at $45 and then the very next day sells it under that?
So I'm kinda dumb when it comes to the stock market. Can someone explain how this happens? Who buys stock at $45 and then the very next day sells it under that?
Data-based traders (including bots) who dont suffer from the sunk cost fallacy.
Also, who says the people selling were IPO buyers? Other people (including some that would not be impacted by insider windows) had stock before the IPO but had less ability to trade it when it wasn't public.
So I'm kinda dumb when it comes to the stock market. Can someone explain how this happens? Who buys stock at $45 and then the very next day sells it under that?
> Who buys stock at $45 and then the very next day sells it under that? Data-based traders (including bots) who dont suffer from the sunk cost fallacy. Also, who says the people selling were IPO buyers? Other people (including some that would not be impacted by insider windows) had stock before the IPO but had less ability to trade it when it wasn't public.
Yeah I could see myself bailing out if I had knowledge of what Uber was like from the inside.
This can't be a surprise to anyone. Given Lyfts performance, after it's IPO, the fact that UBER is not profitable and really doesn't have a near term plan to be. The stock will continue to struggle. They could follow the Amazon model to profits, get big enough to dominate the niche, but they at least need a profit engine, that would give them cash flow. It would let the company grow without having to continuously hav…
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> Who buys stock at $45 and then the very next day sells it under that? Data-based traders (including bots) who dont suffer from the sunk cost fallacy. Also, who says the people selling were IPO buyers? Other people (including some that would not be impacted by insider windows) had stock before the IPO but had less ability to trade it when it wasn't public.
Ah interesting. I didn't think anyone who owned stock before IPO could sell it that soon. Yeah I could see myself bailing out if I had knowledge of what Uber was like from the inside.
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I had a funny discussion about Uber with my uncle. I said I refuse to use it because they are a shitty company who are only cheap because they are using investor money to subsidise the rides on the plan of forcing the other players out of the market. His answer was that the barriers to entry on private car hire are so low that if Uber are doing this as their plan and I dislike them, I should use them as much as possi…
Doing exactly what Uber wants isn't how you kill them. They're subsidizing the rides right now, but if everybody followed your uncle's advice, Uber would very quickly "win" the rideshare wars, establish their long-sought-after monopoly, and raise prices.
How would they keep out competition if the barrier to entry is low?