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Lyft’s blockbuster IPO proves big losses are the new normal

By Quartz

Lyft began trading on the Nasdaq today (March 29), kicking off what promises to be a big year for money-losing consumer tech startupsRead full story

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  • On a personal level I use Lyft given Uber’s history of harassment and unethical behavior though I recognize Uber’s newer leadership is working to change their prior toxic culture. From a purely innovation perspective Uber is a far more innovative company compared to Lyft and my prediction is that they

    On a personal level I use Lyft given Uber’s history of harassment and unethical behavior though I recognize Uber’s newer leadership is working to change their prior toxic culture. From a purely innovation perspective Uber is a far more innovative company compared to Lyft and my prediction is that they will do a lot better when they IPO.

  • Looks like there was demand... (And more parochially - let’s see what this and the other IPOs does to San Francisco housing prices...)

  • The success of this IPO and the subsequent successful IPOs of Uber and AirBnB to come, I wish we had a robust co-op startup ecosystem similar to our tech startup ecosystem made up of like minded LPs, thoughtful and thematic VCs, and amazing (co-op)entrepreneurs. Imagine the initial investors and founder

    The success of this IPO and the subsequent successful IPOs of Uber and AirBnB to come, I wish we had a robust co-op startup ecosystem similar to our tech startup ecosystem made up of like minded LPs, thoughtful and thematic VCs, and amazing (co-op)entrepreneurs. Imagine the initial investors and founder doing very well, but the upside is shared with the folks who make these companies so valuable, ie a better way to (pre)distribute capital instead of (re)distributing it. See more here - https://www.linkedin.com/pulse/co-op-community-capitalism-david-k-park-phd.

  • NASDAQ, we have Lyft off.

    I think pricing above the top of your range and then getting a 20% day one pop is pretty much the textbook definition of a perfect IPO.

    Here's how the pre-IPO investors made out (per WSJ's Rolfe Winkler)

    What investors first paid for Lyft (IPO price $72, opened at $87)

    NASDAQ, we have Lyft off.

    I think pricing above the top of your range and then getting a 20% day one pop is pretty much the textbook definition of a perfect IPO.

    Here's how the pre-IPO investors made out (per WSJ's Rolfe Winkler)

    What investors first paid for Lyft (IPO price $72, opened at $87)

    $0.23 per share, Floodgate Fund

    $0.76, Mayfield Fund

    $2.10, Founders Fund

    $4.25, Andreeesen Horowitz

    $10.13, Coatue

  • Confetti aside, there is a lot not to celebrate here. It’s not clear that there is a robust path to profit for either Lyft or Uber that doesn’t harm riders or drivers (or other stakeholders)—I see these companies waging a war of attrition (subsidizing rides in a price war) to become a dominant platform

    Confetti aside, there is a lot not to celebrate here. It’s not clear that there is a robust path to profit for either Lyft or Uber that doesn’t harm riders or drivers (or other stakeholders)—I see these companies waging a war of attrition (subsidizing rides in a price war) to become a dominant platform and then extract economic rents.

    Especially with the intermediary startups, as David Park noted, it seems the people doing the work are not only not rewarded for their early support, they’re livelihood is at the whim of changing policies (see how tips were handled in the context of minimum earning policies for DoorDash and others). And, it’s insular: a small group of people repeatedly benefit from a tight-knit VC world, as the Times notes: https://www.nytimes.com/interactive/2019/03/29/opinion/sunday/lyft-ipo.html

    Companies are gaining scale and using that power to minimize their accountability. Further, as others has noted, index fund holders will be affected as these companies grow and are included in indices, but the two-class stock structure precludes good governance and effective shareholder representation.

  • Should we expect a humpty dumpty fall here. Seeing that Facebook took the same slid down the year after its IPO

  • It’s fine to lose money in private markets. We’ll see how long it lasts now that they’ve gone public

  • Big wins for early investors looking to cash out.

    I believe we should be concerned by the corrosive potential of "growth-over-profitability" strategies that lead to IPOs of companies that are not profitable.

  • Losses should never be the new normal for any IPO. Operating for the sake of profit, and ownership of the production, be it private or in the public markets, is the basis of capitalism. Our markets, our exchanges, and our publicly traded companies exist on the basis of a competition of profitability

    Losses should never be the new normal for any IPO. Operating for the sake of profit, and ownership of the production, be it private or in the public markets, is the basis of capitalism. Our markets, our exchanges, and our publicly traded companies exist on the basis of a competition of profitability, to make losses and big losses the new normal for an IPO is to undermine the very fabric of our economy and society.

  • This sets the tone for what should be an exciting years on IPOs with Uber and Airbnb to follow. Let's see if investor demand holds steady and Godspeed to these companies in sticking to their founding philosophies and values in the face of public regulation and shareholder demands

  • Are we staring at an #AssetBubble in making? The amount of #liquidity in US markets far exceeds investable near-liquid financial assets. #DigitalPlanform companies such as Lyft, Uber, Air B&B offer a few “sexy” investment options to these hungry investors. Contrary to the Pundits, I see this inflationary

    Are we staring at an #AssetBubble in making? The amount of #liquidity in US markets far exceeds investable near-liquid financial assets. #DigitalPlanform companies such as Lyft, Uber, Air B&B offer a few “sexy” investment options to these hungry investors. Contrary to the Pundits, I see this inflationary tendencies trickling into less liquid assets later and I see no #recessionary pressures anywhere!

  • IPO opening gains has a glamour to it but has nothing to do with the fundamentals in case of Lyft. I feel uncomfortable with statements like 'Lyft’s losses are largely due to its costly battle for US market share with Uber' and like 'Long term, Lyft, like other companies in the ride-hail industry, is

    IPO opening gains has a glamour to it but has nothing to do with the fundamentals in case of Lyft. I feel uncomfortable with statements like 'Lyft’s losses are largely due to its costly battle for US market share with Uber' and like 'Long term, Lyft, like other companies in the ride-hail industry, is banking on mass deployment of autonomous vehicles to make its business more profitable by eliminating the main cost—the driver'.

    It reads like a race to kill Uber with investor money and tools for generating rewards for the investors are still being conceptualized. 🤔 Interesting vision though, 'Give drivers better opportunities than driving people around.. Self driving solutions' 😌

    The fundamentals are temporarily kept aside during IPO and limelight is built up to encash on the glamour bubble.. Which eventually will fizzle out in the absence of fundamentals.

    Make hay when the sun shines, eh? 👍

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