The stock price drop isn’t exactly surprising. There are heavy losses from last year, another year of tremendous losses this year, and while growth is highly va

The stock price drop isn’t exactly surprising. There are heavy losses from last year, another year of tremendous losses this year, and while growth is highly valued there is a difference between losing 5%, 50%, or 90% of revenue in a calendar year. Snap was certainly overvalued at IPO, again heavy losses and very large revenue growth projections. Each quarter that they missed in their MAU growth and/or revenue growth the stock got hammered. It hit a low and now is rebounding to more sensible levels. If they can get their spending more under control and continue their positive revenue growth they will mature into a solid public company. The other challenge for Lyft is that it’s hard to find a comparable. For Snap you have twitter and Facebook so you can estimate the costs it takes to run the operation as well as the potential revenue on a per user basis from two publicly traded companies that have both been in the market for a while. With Lyft what stock would you use as a comparable to better understand their cost structure at scale as well as the proper way to value their customers true LTV? The stock is still trading well above the last private round. I would consider it entering into true bear territory if it starts trading below the last private valuation. Which is what happened to Snap. Then that shows you that valuing a stock on future growth especially at the later stages can be quite dangerous as any misstep is magnified. This is also challenging news for Uber really. Because it has a similar story. Great revenue growth but heavy losses. If anything coming out first was great, they get all of the press and attention. The IPO was a great success internally because they capitalized the company well and given the pop and the receding stock price they didn’t leave any money on the table. Now that they are public it’s going to be about the long game. Given the heavy drop in price, you would expect this to continue for the next several quarters until after the lock up period when more shares will hit the market. They need to keep hitting their numbers with no negative surprises as well. It’s not crazy to see them get adjusted down 30-50% and have the stock settle into a floor before the fundamentals of the business really take over in terms of valuation.