4 ms·

I explained above, but Uber is way over-valued to the point that they cannot have a reasonable IPO and acquisitions are off the table to all but a few companies

by jimminy 10y ago

I explained above, but Uber is way over-valued to the point that they cannot have a reasonable IPO and acquisitions are off the table to all but a few companies that don't need that business and can acquire a direct competitor at a more reasonable expense.

prostoalex 10y ago
Box and Facebook both had IPOs that priced them below the last private round, and yet are limping along. Seems like positive cashflow is the key.
- jimminy 10y ago
  For Facebook, that is absolutely false. Their last known valuation prior to IPO based on a raise was $65B (March 2011), they IPO'd at $104B. And Box had a small downward valuation shift (-36%, -$0.9B), between last raised valuation and IPO. Uber's numbers even giving them liberal growth potential of 500% places them at around $33.75B (-50% current value, -$34B).
  - prostoalex 10y ago
    Well, you're right, FB initial IPO price on day 1 was above the pricing in the last private round. However, shortly after, and by "shortly" I mean within 3-4 months after the IPO when most of the insiders were still under lock-up, a single share of FB could've been bought for high teens, which was at a significant discount to the last round.
    - jimminy 10y ago
      That discussion isn't that relevant, when you're trying to figure out this kind of valuation though. The reason for that dip was largely 90 and 180 day lock-ups increasing supply of shares traded as employees sold stock. Also there were economic fears helping pressure the stock down. FB's valuation at IPO was still smaller than it's primary domestic market's (ad spending) size ($165B in 2012). Uber's primary domestic market (taxis) is only valued at ($20B), so if they captured all of the US taxi, their current valuation requires them to capture over 300% of the market.^ Now obviously that's not a perfect barometer. There are other variables and adjustments to make, but it makes it very clear that there is limited upside potential. Without claiming another market (ownership), it's actually damn near impossible. They've also ceded competition in the Chinese market to DiDi, so they can't make it up via global expansion either. ^edit (Obviously, this is a 1x multiple, as you increase to more reasonable values it drops the share required, but you have to push it pretty hard to reduce market share to a decent level.)

by jimminy 10y ago

prostoalex 10y ago

Box and Facebook both had IPOs that priced them below the last private round, and yet are limping along. Seems like positive cashflow is the key.

jimminy 10y ago
For Facebook, that is absolutely false. Their last known valuation prior to IPO based on a raise was $65B (March 2011), they IPO'd at $104B. And Box had a small downward valuation shift (-36%, -$0.9B), between last raised valuation and IPO. Uber's numbers even giving them liberal growth potential of 500% places them at around $33.75B (-50% current value, -$34B).
- prostoalex 10y ago
  Well, you're right, FB initial IPO price on day 1 was above the pricing in the last private round. However, shortly after, and by "shortly" I mean within 3-4 months after the IPO when most of the insiders were still under lock-up, a single share of FB could've been bought for high teens, which was at a significant discount to the last round.
  - jimminy 10y ago
    That discussion isn't that relevant, when you're trying to figure out this kind of valuation though. The reason for that dip was largely 90 and 180 day lock-ups increasing supply of shares traded as employees sold stock. Also there were economic fears helping pressure the stock down. FB's valuation at IPO was still smaller than it's primary domestic market's (ad spending) size ($165B in 2012). Uber's primary domestic market (taxis) is only valued at ($20B), so if they captured all of the US taxi, their current valuation requires them to capture over 300% of the market.^ Now obviously that's not a perfect barometer. There are other variables and adjustments to make, but it makes it very clear that there is limited upside potential. Without claiming another market (ownership), it's actually damn near impossible. They've also ceded competition in the Chinese market to DiDi, so they can't make it up via global expansion either. ^edit (Obviously, this is a 1x multiple, as you increase to more reasonable values it drops the share required, but you have to push it pretty hard to reduce market share to a decent level.)