It is time for another transcribed edition of Equity. This week for the regularly scheduled episode, we had the entire crew of the San Francisco studio. Kate Clark, Connie Loizos and Alex Wilhelm were eventually joined by Om Malik, former journalist and current VC in True Ventures.
They called together after Uber had priced, so they had a lot to dig into: The low price, it would pop and former CEO and co-founder Travis Kalanick would be on the ring of the New York clock (he was not) .
But that wasn't all Uber; they spoke Carta, Cruise and Harry. Below is an excerpt. And come back soon for an emergency episode where Alex and Kate will go deeper on the Uber IPO. For access to full transcription, join the Extra Crunch. Learn more and try it for free.
Alex: Well, I'll go back to the prize very quickly because $ 82 billion is under 90 we'd heard after we'd heard 1[ads1]20 back in October. So, this is a dramatic downgrade in price, which I think, Om is actually pretty smart because they want a nice pop and things get better.
Connie: And even when you look back, it doesn't matter so much. I mean, I feel that a few people have already pointed this out in the media today. But Google, Facebook, I mean, there have been so many companies where their IPO didn't seem to go very well. I just don't think it's really going to mean anything in the long run what's going on tomorrow.
Alex: Well, the difference is that Uber needs to raise a lot of money to stay alive. I mean, Facebook when they went public, had a relatively rough post-IPO period, had $ 1 billion in return on demand. They were fine. Their IPO was not as important except liquidity then. It was not a fundraising metric. At this price, they will get less money than they could have at a higher price, and they burn tons of it.
Kate: I think there are many reasons why they probably reduced their goals, but I think that one probably has to do with Lyft's performance. So I think we should just go over quickly. Lyft released its first earnings report this week, which was quite interesting. TL; The DR is that they had an income of $ 776 million on losses of $ 1.14 billion, which contained 894 million of share-based compensation-related payroll costs, which is only large IPO spending. So the losses were great, yes. The company's revenue exceeded Wall Street estimates, which were 740 million. But of course, with all the IPO expenses, the losses came significantly higher.