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Home / Business / Transport IPO Review: Lift And Uber Hit The Brakes – Lift, Inc. (NASDAQ: LIFT)

Transport IPO Review: Lift And Uber Hit The Brakes – Lift, Inc. (NASDAQ: LIFT)



A talk about two IPOs

The two dominant ridesharing companies recently had: Uber Technologies, Inc. (UBER) on the New York Stock Exchange and Lyft, Inc. (LYFT) on Nasdaq. Both shares have gone bad since their public trading began. With the latest trading tensions leading the markets significantly lower, IPO timing has not been ideal. Lyft's business is focused in the United States, with some business done in Canada, while Uber operates in 63 countries around the world. However, a closer look at SEC filings from both companies shows that there is real reason to be cautious about these companies' future and their expensive valuations.

Lifting – Second largest loss at start-up the year before IPO

Lifting bearing has lost almost half of the value since high on its first trading day on March 29. It was a massive sale during the first few days after the IPO, and after a short recovery time, the sale resumed. From the beginning of April to the earnings release, the shares traded mainly sideways, only to sell after the last quarterly loss of $ 9.02 per share was announced by market May 7. The weakness of the commercial war market and the poor development of Uber IPO may have contributed to giving fuel further negative feelings on the stock.

  LYFT stock price chart

(Source: thinkorswim)

We look at the following quarterly statements, we can see that Lifting is actually rapidly growing revenue. A brief survey of the following data may lead to a fairly bullish perspective on the company's growth. Revenue from fiscal policy 2019 Q1 shows an increase of 95% and a 16% increase in the quarter. Nevertheless, Lyft consistently shows large net losses, and manages an adjusted EBITDA loss of $ 270-280 million for Q2 2019 of $ 800-810 million of revenue.

  LYFT quarterly financed

(Source: LIFT S-1)

  LIFT turnover 1Q 2019

(Source: LIFT 8-K)

  LIFT active riders growth

(Source: LIFT S -1)

This type of growth may look attractive if it was some sort of clear path to profitability in the future. But with Lyft, there seems to be hope for different and risky games such as scooter and bicycle hire and autonomous taxis. There seems to be no real plan for transition to profitability for the company's core business, just a plan for continued rapid expansion. It is possible much of Lyft's growth has come from poaching customers and drivers outside Uber through competitive prices and operating incentive programs. Lift's rider share market share increased from 22% in December 2016 to 39% in December 2018. The company has previously offered drivers attractive one-time bonuses to sign up for the ridesharing program, along with promotional events that rides for riders. This type of expansion and violent war with Uber does not seem to be sustainable.

The LYFT share's two-tier share class concentrates voting rights in the hands of co-founders Logan Green and John Zimmer. This only disturbs my confidence in the company given its current strategic direction.

I think the company puts it nicely in the risk factor's summary of its S-1:

We have a history of net loss and we cannot achieve or maintain profitability in the future,

We face strong competition and can lose market share to our competitors; "

Uber – Biggest loss on start-up the year before IPO?

Uber started trading on Friday May 10. After some initial purchase, the sellers took control and dropped the stock during the opening price on the first day. Seller still afterwards, and the stock sold together with the wider market on Monday, Tuesday, May 14, the share price showed some recovery after the news was released that the US National Labor Relations Board said the Uber drivers were classified as contractors, not employees, and thus not entitled to minimum wage or overtime pay. 19659021] <img src = "https://static.seekingalpha.com/uploads/2019/5/14/48094975-1557876905402427.png" alt = "UBER stock price

[Kilde: thinkorswim]

Uber was technically profitable in 2018 because it sold its Russian business to Yandex (YNDX) and its Southeast Asian business to Grab (GRAB), raising nearly $ 5 billion.


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