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Some notes from watching Uber open: - if it closes below $45(its IPO price) it will be the first time since 2008 that the happened for a major IPO - TD Amerit

Some notes from watching Uber open: - if it closes below $45(its IPO price) it will be the first time since 2008 that the happened for a major IPO - TD Ameritrade executed more orders in the first 10 minutes of trading than they did for the first 2.5 hours with Lyft. - Uber is 9% of all trading at TD Ameritrade, retail loves this stock, - market is down today, which isn't helping Uber but its probably not much of a factor - Kudos to Citadel, stock opened without a hitch and they seemed to nail the opening price, - Boo to the underwriters(Morgan Stanley), who seemed to misjudge the market's appetite, important to note that major buyers at IPO, Fidelity and such already had exposure to Uber pre IPO so maybe this staying private longer but selling shares to public fudns had an effect? https://news.yahoo.com/uber-employees-may-not-partying-151719950.html https://news.yahoo.com/uber-employees-may-not-partying-15171... - interesting piece on how Uber has grown its market cap in the past few years at the expense of its share price and how that effects later employees. - later investors like the Saudi Public Investment Fund can’t be happy with the opening. - from Bloomberg without comment...."Overheard trader on the floor: “That’s what you get when you don’t make a profit. If you don’t make money, people don’t want to buy you.” - Biggest IPO since Facebook, that's something to be proud of!! Date: - June 4 is expiration of 25-day quiet period for analysts at underwriting banks. Expect bullish initiations on this date - Nov. 6 expiration of Uber's IPO lockup. Large selling pressure expected to be asserted on this day as is typical for most IPO's. Personal thought. It may be tough for employee's to not see this pop to say $65-$70 but in the long run its almost certainly better to open flat than to pull a "lyft" and get a first day pop that you price your options at in your head and to then have to cut that price by 40% before you get a chance to sell. EDIT for comment below.

withdavidli 7y ago
For your point on TD Ameritrade, they're offering commission rebate first 5 days. Don't believe they offered that for Lyft. They're saying it's because they did not participate in Ubers IPO.
- deleted 7y ago
  [deleted]
gilaniali 7y ago
Where did you get the TD Ameritrade data from?
caprese 7y ago
doesn't matter, made $8,100,000 in a day oh you were worried about the traders and hopeful Uber employees that bet half a decade of their life on a good share price HA HAHAHA. Should really start looking at this from the underwriter and issuer perspective to understand the success story here. Retail buys ticker symbols that have been marketed to them. Everyone else dumps. Company made a ton of money and can do whatever it wants with it, they gain nothing from secondary market trading today. VCs, founders and employees can't sell for another 60-90 days, but founders can give themselves big bonuses (and employees too but I mean.. what world are you living in)
- zeropnc 7y ago
  I feel like this point could’ve been made stronger without all the resentment
  - eropple 7y ago
    A certain level of moral dismay is not exactly unwarranted around stuff like this, is it?
  - caprese 7y ago
    no resentment from my end best way to play the stock, bond and crypto markets is from the issuer side, and a lot of people don't seem to understand that and media seems to play the role of getting people to not understand and I think it is weird they only talk about the chances for the retail/secondary market perspective, dressed up as analysis
    - refurb 7y ago
      Are you arguing that the banks that work on the IPO shouldn't make any money off it?
      - caprese 7y ago
        why do you think I'm arguing anything? thats what you got out of that? be an issuer or a bank and sit it out if you aren't. lets see, if I was arguing anything it would be that the media should talk more about the deal flow itself and pretty much ignore secondary market trading, showcasing the convenants of the deal in comparison to other deals. How about celebrating with the underwriters and profile the MD who worked on the deal - if we are putting large public deals on a pedestal - lets pop champagne with the people that actually made money and stop pretending like the secondary market price even matters, or maybe cut occasionally to a live stream to the underwriter's traders trying to hold up the stabilizing bid like it was a poker match if the market is dumping, and if they fold under too much selling pressure have silly music and the hosts on picture-in-picture laughing as if it was a Japanese game show
pastor_elm 7y ago
It's insane how heavy the retail investor scene is right now. Everyone and their grandma is an expert on tech stocks it seems.
- jonknee 7y ago
  It's nothing like the .com boom, CNBC was everywhere. Uber just happens to be really well known by everyone and is thus getting a lot of attention. Your hair dresser isn't likely talking about the Zoom IPO like they would have in 1999.
  - zepearl 7y ago
    1998-1999 was sooo crazy. Most stocks kept climbing, high profits dealing with options (calls/puts), almost every week me and my friends celebrated profits. I remember thinking "it cannot be this easy, but it looks like that it is". Then came the big surprise, hehe. Luckily I have always been defensive so I didn't lose a lot of money, but still... .
- anpago 7y ago
  When your shoeshine person gives you trading tips..
  - asaph 7y ago
    Who still gets their shoes shined?
    - MattSteelblade 7y ago
      In case you're not aware, it's in reference to a famous quote by Joe Kennedy, "You know it's time to sell when shoeshine boys give you stock tips. This bull market is over." As the story goes, less than a year before Black Tuesday, a shoeshine boy told him to "...buy Hindenburg."
      - asaph 7y ago
aqme28 7y ago
> if it closes below $45 it will be the first time since 2008 that the happened for a major IPO Sorry, first time that what happened?
- gizmo385 7y ago
  This reads almost like a sports statistic with how arbitrary it feels.
  - zd123 7y ago
    It’s not arbitrary at all. IPOs are structured by investments banks to ‘pop’ on the first day. If the closing price is below the IPO that is generally regarded as a failure and may imply over-valuation.
    - wesammikhail 7y ago
      > If the closing price is below the IPO that is generally regarded as a failure and may imply over-valuation. Generally regarded by whom* exactly? The world is full of examples of IPOs that did badly on opening day/week but soared like mad afterwards. These generalizations and pretense of knowledge helps no one; especially considering that "over-valued" is not something that can be determined in a short period of time as value is relative to the context in which the asset presents itself. * as a non-native English speaker, did I use whom correctly or should it be "who"? Edit: thank you for the reply mr scarejunba!
      - scarejunba 7y ago
        > as a non-native English speaker, did I use whom correctly or should it be "who"? It is correct. Object of the sentence. Common mnemonic: whom answered by him/them, who answered by he/they
      - zd123 7y ago
        It’s considered an over-valuation by investors and anyone who has ever worked in a sellside investment bank or on IPOs. The goal of the investment bank is to work with the company to come up with a sensible valuation that will clear and pop on the IPO date. The bank has to take into account the market conditions and investor appetite when structuring the trade and setting the price. It is also why you hear of company’s pulling out of IPOs when market conditions are not favourable. I don’t follow your point exactly, if the value of the asset is relative to the context it presents itself, and the price you set for the IPO is not consistent with the said context, then you are incorrectly valuing the asset. The asset can be under or overvalued. For the record I have actually worked on IPOs at an investment bank structuring these kind of trades, so it’s not a pretense of knowledge on my part.
Thaxll 7y ago
"market is down today, which isn't helping Uber but its probably not much of a factor" It's actually a big factor.
- chollida1 7y ago
  > "market is down today, which isn't helping Uber but its probably not much of a factor" > It's actually a big factor. I assume you are trolling but just in case.... the SPY is now up on the day and Uber is still below its IPO price, so I guess we can put to rest the idea that a down market is a big factor in Uber trading below its IPO price.
  - drocer88 7y ago
    Market is up today (as of 3:20pm EST). Über and Lyft are down > 6% . SV Unicorn hype aside, there's not a big moat around running a jitney cab company.
    - jimmywanger 7y ago
      Hmmm. Never heard that term before. I usually hear "gypsy cab".
      - davidrupp 7y ago
        https://en.wikipedia.org/wiki/Illegal_taxicab_operation https://en.wikipedia.org/wiki/Illegal_taxicab_operation
      - jdavis703 7y ago
        Just FYI many people consider “Gypsy” a slur nowadays since it’s commonly used in regards to illegal behaviors (like running outlaw cab services). I understand your intent was not to offend, but this is perhaps why the parent referred to it by a different name. See more on Wikipedia: https://en.m.wikipedia.org/wiki/Names_of_the_Romani_people https://en.m.wikipedia.org/wiki/Names_of_the_Romani_people
      - 7y ago
tux1968 7y ago
> Boo to the underwriters(Morgan Stanley), who seemed to misjudge the market's appetite Who suffers if the price is quickly adjusted downward by the market? How is that different than it being released at that final market price from the get go? Naively I would think that setting it too high ensures maximum value is captured rather than going to early traders.
- resters 7y ago
  The investment bank sells a lot of shares to its own preferred clients. If the price then drops (because the initial offering price was too high) those preferred clients lose money. So the bank has every incentive to price it low, and usually does. So when the market goes even lower, we know that the IPO was done out of desperation and that early investors who had influence over the IPO price were eager to dump some or all of their positions. One day is too soon to know for certain that this happened. But if the price is still down a week or two later then it probably did.
  - BoiledCabbage 7y ago
    > So when the market goes even lower, we know that the IPO was done out of desperation How is that the correct conclusion. It sounds like the correct conclusion is they still over estimated the market price. Nothing about desperation for or against.
    - resters 7y ago
      > It sounds like the correct conclusion is they still over estimated the market price The bank has every incentive not to do that. The bank must juggle the needs of its various constituencies, preferred investors (who provide capital expecting not to have it lose value right away), the firm (which wants to raise capital) and existing investors (who may want to liquidate). If a bank routinely over-prices IPOs, then preferred investors will stop providing capital. If the bank routinely under-prices IPOs, then firms will choose other banks to underwrite their IPOs. In addition to the above, the investment bank owns a lot of inventory and strategically buys and sells in order to help keep the price close to the expected price. When this doesn't happen, it might be because the bank couldn't afford to constrain the price movement and had to settle for the bad optics. This is how the system is supposed to work, but the main reason an IPO would be over-priced (all things considered) is if the existing investors had too much say in the price, since this tarnishes the bank's credibility for future IPOs events.
kortilla 7y ago
Where do you get those TD ameritrade stats?
nPo102y 7y ago
Facebook (2012) needed strong underwriter support to barely close above opening price.
- unreal37 7y ago
  Facebook had a weird first day. They literally broke the stock market software that day.
- underwater 7y ago
  Facebook's first day of trading was a mess, NASDAQ was crashing and dropping orders all day.
carlsborg 7y ago
Facebook was at ~$44 on the day it IPOed, and proceeded to fall over the next month to about $19. Today its at $187.
- almost_usual 7y ago
  Facebook was also profitable and had about 10x the number of users compared to Uber pre IPO https://www.forbes.com/sites/greatspeculations/2019/04/22/ubers-ipo-valuation-makes-no-sense/#7c360cc540d3 https://www.forbes.com/sites/greatspeculations/2019/04/22/ub...
  - fooker 7y ago
    Uber has paying users. Facebook had advertisement targets. Doesn't make too much sense to conflate the two.
    - jdironman 7y ago
      Wait until drivers can make money by having in-ride advertising screens. (I kid.)
      - lbotos 7y ago
        They already can. I've seen this in 2 cities now. One of the reasons why I prefer Uber/Lyft is to _not_ see the cab ads display.
        JCharante 7y ago
        I've been in an Uber in Boston where this was the case. They had a tablet hanging off the front passenger seat that alternated between trivia questions and ads.
        jdironman 7y ago
        That sounds more like the app they were using had ads built in?
spullara 7y ago
PSTG closed below its IPO price in 2015 with $4B market cap. How are you classifying IPOs?
- a13n 7y ago
  Not sure how they're quantifying "major", but $4B is only 5% the size of uber and I'd guess most people haven't heard of Pure Storage.
caprese 7y ago
doesn't matter, made $8,100,000,000 in a day should really start looking at this from the underwriter and issuer perspective to understand the success story here. Retail buys ticker symbols that have been marketed to them. Everyone else dumps. Company made a ton of money and can do whatever it wants with it, they gain nothing from secondary market trading today. VCs, founders and employees can't sell for another 60-90 days, but founders can give themselves big bonuses (and employees too but I mean.. lets be honest)
- dclowd9901 7y ago
  That's an interesting definition of "made"... assumes the concept of liquidity has no meaning.
  - caprese 7y ago
    > That's an interesting definition of "made"... assumes the concept of liquidity has no meaning. Thats interesting definition of "literally traded a bunch of shares to underwriters in exchange for $8,100,000,000 and let the underwriters worry about liquidity on the stock exchanges" Uber has dollars for the shares they sold. Liquidity is not a concern for the party of the transaction I talked about.
    - rlucas 7y ago
      ...aaaand, Uber (meaning, the owners of Uber pre-IPO) has less ownership in the business afterwards. Sure, you can argue that the $8.1B is something "real" that the owners of Uber have more of, afterwards. But you also have to acknowledge that the business of running Uber is also something "real" that the owners of Uber have less of, afterwards, having traded it in a heavily-scrutinized auction.
      - caprese 7y ago
        > ...aaaand, Uber (meaning, the owners of Uber pre-IPO) has less ownership in the business afterwards. How is that even a point? They had 23 funding rounds according to Crunchbase where the same thing happened everytime, with today being the 24th. You don't have to acknowledge any of those things, this is how finance works.
caprese 7y ago
The media should talk more about the deal flow itself and pretty much ignore secondary market trading, showcasing the covenants of the deal in comparison to other deals. How about celebrating with the underwriters and profile the MD who worked on the deal - if we are putting large public deals on a pedestal - lets pop champagne with the people that actually made money and stop pretending like the secondary market price even matters, or maybe cut occasionally to a live stream to the underwriter's traders trying to hold up the stabilizing bid like it was a poker match if the market is dumping, and if they fold under too much selling pressure have silly music and the hosts on picture-in-picture laughing as if it was a Japanese game show
leroy_masochist 7y ago
> June 4 is expiration of 25-day quiet period for analysts at underwriting banks. Expect bullish initiations on this date Why? There are plenty of examples of equity research analysts pulling no punches on names that the other side of the Chinese wall took public months earlier. And Uber is a classic opportunity for a smart young analyst to get invited on CNBC by throwing some sharply worded shade in their initiating coverage.
jaimex2 7y ago
I know very little about shares. How does an IPO close lower on it's first day? Wouldn't someone have to have bought in at $45 and sold for lower in the same day? Why would anyone do this?
- incompatible 7y ago
  Because they think it will go even lower and want to get out before losing more? Alternatively, they may have got in at a lower price and are still taking a profit.
windexh8er 7y ago
> Personal thought. It may be tough for employee's to not see this pop to say $65-$70 but in the long run its almost certainly better to open flat than to pull a "lyft" and get a first day pop that you price your options at in your head and to then have to cut that price by 40% before you get a chance to sell. The reality is Uber isn't worth $65-70 today given long term risk. As many others have pointed out opex is well over 150% of revenue. Now that could be fine if the long strategy can reel that in over the next decade. I don't see any of that other than a smattering of "bets" (Uber Eats, scooters, etc). I could very well be wrong but I intentionally didn't buy given what all tech IPOs have done lately. As a consumer who doesn't have the option to get in early I'm at the mercy of the large firms who can take profit off large positions which snowball bringing the valuation back to reality. I think we see more of these "backfires" as people are sick of propping up large financials and more caution around waiting for stocks to settle. If Uber employees expected it to pop north of $50 they're going to be waiting a while. There's no reason to buy now, risk is high that a few large trades sinks the stock into mid $30s or lower territory. Business Insider had a nice graph that put the valuation into context: https://markets.businessinsider.com/news/stocks/uber-technologies-initial-public-offering-uber-valuation-comparison-2019-4-1028190015 https://markets.businessinsider.com/news/stocks/uber-technol...

withdavidli 7y ago

For your point on TD Ameritrade, they're offering commission rebate first 5 days. Don't believe they offered that for Lyft. They're saying it's because they did not participate in Ubers IPO.

deleted 7y ago
[deleted]

gilaniali 7y ago

Where did you get the TD Ameritrade data from?

caprese 7y ago

doesn't matter, made $8,100,000 in a day oh you were worried about the traders and hopeful Uber employees that bet half a decade of their life on a good share price HA HAHAHA. Should really start looking at this from the underwriter and issuer perspective to understand the success story here. Retail buys ticker symbols that have been marketed to them. Everyone else dumps. Company made a ton of money and can do whatever it wants with it, they gain nothing from secondary market trading today. VCs, founders and employees can't sell for another 60-90 days, but founders can give themselves big bonuses (and employees too but I mean.. what world are you living in)

zeropnc 7y ago
I feel like this point could’ve been made stronger without all the resentment
- eropple 7y ago
  A certain level of moral dismay is not exactly unwarranted around stuff like this, is it?
- caprese 7y ago
  no resentment from my end best way to play the stock, bond and crypto markets is from the issuer side, and a lot of people don't seem to understand that and media seems to play the role of getting people to not understand and I think it is weird they only talk about the chances for the retail/secondary market perspective, dressed up as analysis
  - refurb 7y ago
    Are you arguing that the banks that work on the IPO shouldn't make any money off it?
    - caprese 7y ago
      why do you think I'm arguing anything? thats what you got out of that? be an issuer or a bank and sit it out if you aren't. lets see, if I was arguing anything it would be that the media should talk more about the deal flow itself and pretty much ignore secondary market trading, showcasing the convenants of the deal in comparison to other deals. How about celebrating with the underwriters and profile the MD who worked on the deal - if we are putting large public deals on a pedestal - lets pop champagne with the people that actually made money and stop pretending like the secondary market price even matters, or maybe cut occasionally to a live stream to the underwriter's traders trying to hold up the stabilizing bid like it was a poker match if the market is dumping, and if they fold under too much selling pressure have silly music and the hosts on picture-in-picture laughing as if it was a Japanese game show

pastor_elm 7y ago

It's insane how heavy the retail investor scene is right now. Everyone and their grandma is an expert on tech stocks it seems.

jonknee 7y ago
It's nothing like the .com boom, CNBC was everywhere. Uber just happens to be really well known by everyone and is thus getting a lot of attention. Your hair dresser isn't likely talking about the Zoom IPO like they would have in 1999.
- zepearl 7y ago
  1998-1999 was sooo crazy. Most stocks kept climbing, high profits dealing with options (calls/puts), almost every week me and my friends celebrated profits. I remember thinking "it cannot be this easy, but it looks like that it is". Then came the big surprise, hehe. Luckily I have always been defensive so I didn't lose a lot of money, but still... .
anpago 7y ago
When your shoeshine person gives you trading tips..
- asaph 7y ago
  Who still gets their shoes shined?
  - MattSteelblade 7y ago
    In case you're not aware, it's in reference to a famous quote by Joe Kennedy, "You know it's time to sell when shoeshine boys give you stock tips. This bull market is over." As the story goes, less than a year before Black Tuesday, a shoeshine boy told him to "...buy Hindenburg."
    - asaph 7y ago

aqme28 7y ago

> if it closes below $45 it will be the first time since 2008 that the happened for a major IPO Sorry, first time that what happened?

gizmo385 7y ago
This reads almost like a sports statistic with how arbitrary it feels.
- zd123 7y ago
  It’s not arbitrary at all. IPOs are structured by investments banks to ‘pop’ on the first day. If the closing price is below the IPO that is generally regarded as a failure and may imply over-valuation.
  - wesammikhail 7y ago
    > If the closing price is below the IPO that is generally regarded as a failure and may imply over-valuation. Generally regarded by whom* exactly? The world is full of examples of IPOs that did badly on opening day/week but soared like mad afterwards. These generalizations and pretense of knowledge helps no one; especially considering that "over-valued" is not something that can be determined in a short period of time as value is relative to the context in which the asset presents itself. * as a non-native English speaker, did I use whom correctly or should it be "who"? Edit: thank you for the reply mr scarejunba!
    - scarejunba 7y ago
      > as a non-native English speaker, did I use whom correctly or should it be "who"? It is correct. Object of the sentence. Common mnemonic: whom answered by him/them, who answered by he/they
    - zd123 7y ago
      It’s considered an over-valuation by investors and anyone who has ever worked in a sellside investment bank or on IPOs. The goal of the investment bank is to work with the company to come up with a sensible valuation that will clear and pop on the IPO date. The bank has to take into account the market conditions and investor appetite when structuring the trade and setting the price. It is also why you hear of company’s pulling out of IPOs when market conditions are not favourable. I don’t follow your point exactly, if the value of the asset is relative to the context it presents itself, and the price you set for the IPO is not consistent with the said context, then you are incorrectly valuing the asset. The asset can be under or overvalued. For the record I have actually worked on IPOs at an investment bank structuring these kind of trades, so it’s not a pretense of knowledge on my part.

Thaxll 7y ago

"market is down today, which isn't helping Uber but its probably not much of a factor" It's actually a big factor.

chollida1 7y ago
> "market is down today, which isn't helping Uber but its probably not much of a factor" > It's actually a big factor. I assume you are trolling but just in case.... the SPY is now up on the day and Uber is still below its IPO price, so I guess we can put to rest the idea that a down market is a big factor in Uber trading below its IPO price.
- drocer88 7y ago
  Market is up today (as of 3:20pm EST). Über and Lyft are down > 6% . SV Unicorn hype aside, there's not a big moat around running a jitney cab company.
  - jimmywanger 7y ago
    Hmmm. Never heard that term before. I usually hear "gypsy cab".
    - davidrupp 7y ago
      https://en.wikipedia.org/wiki/Illegal_taxicab_operation https://en.wikipedia.org/wiki/Illegal_taxicab_operation
    - jdavis703 7y ago
      Just FYI many people consider “Gypsy” a slur nowadays since it’s commonly used in regards to illegal behaviors (like running outlaw cab services). I understand your intent was not to offend, but this is perhaps why the parent referred to it by a different name. See more on Wikipedia: https://en.m.wikipedia.org/wiki/Names_of_the_Romani_people https://en.m.wikipedia.org/wiki/Names_of_the_Romani_people
    - 7y ago

tux1968 7y ago

> Boo to the underwriters(Morgan Stanley), who seemed to misjudge the market's appetite Who suffers if the price is quickly adjusted downward by the market? How is that different than it being released at that final market price from the get go? Naively I would think that setting it too high ensures maximum value is captured rather than going to early traders.

resters 7y ago
The investment bank sells a lot of shares to its own preferred clients. If the price then drops (because the initial offering price was too high) those preferred clients lose money. So the bank has every incentive to price it low, and usually does. So when the market goes even lower, we know that the IPO was done out of desperation and that early investors who had influence over the IPO price were eager to dump some or all of their positions. One day is too soon to know for certain that this happened. But if the price is still down a week or two later then it probably did.
- BoiledCabbage 7y ago
  > So when the market goes even lower, we know that the IPO was done out of desperation How is that the correct conclusion. It sounds like the correct conclusion is they still over estimated the market price. Nothing about desperation for or against.
  - resters 7y ago
    > It sounds like the correct conclusion is they still over estimated the market price The bank has every incentive not to do that. The bank must juggle the needs of its various constituencies, preferred investors (who provide capital expecting not to have it lose value right away), the firm (which wants to raise capital) and existing investors (who may want to liquidate). If a bank routinely over-prices IPOs, then preferred investors will stop providing capital. If the bank routinely under-prices IPOs, then firms will choose other banks to underwrite their IPOs. In addition to the above, the investment bank owns a lot of inventory and strategically buys and sells in order to help keep the price close to the expected price. When this doesn't happen, it might be because the bank couldn't afford to constrain the price movement and had to settle for the bad optics. This is how the system is supposed to work, but the main reason an IPO would be over-priced (all things considered) is if the existing investors had too much say in the price, since this tarnishes the bank's credibility for future IPOs events.

kortilla 7y ago

Where do you get those TD ameritrade stats?

nPo102y 7y ago

Facebook (2012) needed strong underwriter support to barely close above opening price.

unreal37 7y ago
Facebook had a weird first day. They literally broke the stock market software that day.
underwater 7y ago
Facebook's first day of trading was a mess, NASDAQ was crashing and dropping orders all day.

carlsborg 7y ago

Facebook was at ~$44 on the day it IPOed, and proceeded to fall over the next month to about $19. Today its at $187.

almost_usual 7y ago
Facebook was also profitable and had about 10x the number of users compared to Uber pre IPO https://www.forbes.com/sites/greatspeculations/2019/04/22/ubers-ipo-valuation-makes-no-sense/#7c360cc540d3 https://www.forbes.com/sites/greatspeculations/2019/04/22/ub...
- fooker 7y ago
  Uber has paying users. Facebook had advertisement targets. Doesn't make too much sense to conflate the two.
  - jdironman 7y ago
    Wait until drivers can make money by having in-ride advertising screens. (I kid.)
    - lbotos 7y ago
      They already can. I've seen this in 2 cities now. One of the reasons why I prefer Uber/Lyft is to _not_ see the cab ads display.
      - JCharante 7y ago
        I've been in an Uber in Boston where this was the case. They had a tablet hanging off the front passenger seat that alternated between trivia questions and ads.
        jdironman 7y ago
        That sounds more like the app they were using had ads built in?

spullara 7y ago

PSTG closed below its IPO price in 2015 with $4B market cap. How are you classifying IPOs?

a13n 7y ago
Not sure how they're quantifying "major", but $4B is only 5% the size of uber and I'd guess most people haven't heard of Pure Storage.

caprese 7y ago

doesn't matter, made $8,100,000,000 in a day should really start looking at this from the underwriter and issuer perspective to understand the success story here. Retail buys ticker symbols that have been marketed to them. Everyone else dumps. Company made a ton of money and can do whatever it wants with it, they gain nothing from secondary market trading today. VCs, founders and employees can't sell for another 60-90 days, but founders can give themselves big bonuses (and employees too but I mean.. lets be honest)

dclowd9901 7y ago
That's an interesting definition of "made"... assumes the concept of liquidity has no meaning.
- caprese 7y ago
  > That's an interesting definition of "made"... assumes the concept of liquidity has no meaning. Thats interesting definition of "literally traded a bunch of shares to underwriters in exchange for $8,100,000,000 and let the underwriters worry about liquidity on the stock exchanges" Uber has dollars for the shares they sold. Liquidity is not a concern for the party of the transaction I talked about.
  - rlucas 7y ago
    ...aaaand, Uber (meaning, the owners of Uber pre-IPO) has less ownership in the business afterwards. Sure, you can argue that the $8.1B is something "real" that the owners of Uber have more of, afterwards. But you also have to acknowledge that the business of running Uber is also something "real" that the owners of Uber have less of, afterwards, having traded it in a heavily-scrutinized auction.
    - caprese 7y ago
      > ...aaaand, Uber (meaning, the owners of Uber pre-IPO) has less ownership in the business afterwards. How is that even a point? They had 23 funding rounds according to Crunchbase where the same thing happened everytime, with today being the 24th. You don't have to acknowledge any of those things, this is how finance works.

caprese 7y ago

The media should talk more about the deal flow itself and pretty much ignore secondary market trading, showcasing the covenants of the deal in comparison to other deals. How about celebrating with the underwriters and profile the MD who worked on the deal - if we are putting large public deals on a pedestal - lets pop champagne with the people that actually made money and stop pretending like the secondary market price even matters, or maybe cut occasionally to a live stream to the underwriter's traders trying to hold up the stabilizing bid like it was a poker match if the market is dumping, and if they fold under too much selling pressure have silly music and the hosts on picture-in-picture laughing as if it was a Japanese game show

leroy_masochist 7y ago

> June 4 is expiration of 25-day quiet period for analysts at underwriting banks. Expect bullish initiations on this date Why? There are plenty of examples of equity research analysts pulling no punches on names that the other side of the Chinese wall took public months earlier. And Uber is a classic opportunity for a smart young analyst to get invited on CNBC by throwing some sharply worded shade in their initiating coverage.

jaimex2 7y ago

I know very little about shares. How does an IPO close lower on it's first day? Wouldn't someone have to have bought in at $45 and sold for lower in the same day? Why would anyone do this?

incompatible 7y ago
Because they think it will go even lower and want to get out before losing more? Alternatively, they may have got in at a lower price and are still taking a profit.

windexh8er 7y ago

> Personal thought. It may be tough for employee's to not see this pop to say $65-$70 but in the long run its almost certainly better to open flat than to pull a "lyft" and get a first day pop that you price your options at in your head and to then have to cut that price by 40% before you get a chance to sell. The reality is Uber isn't worth $65-70 today given long term risk. As many others have pointed out opex is well over 150% of revenue. Now that could be fine if the long strategy can reel that in over the next decade. I don't see any of that other than a smattering of "bets" (Uber Eats, scooters, etc). I could very well be wrong but I intentionally didn't buy given what all tech IPOs have done lately. As a consumer who doesn't have the option to get in early I'm at the mercy of the large firms who can take profit off large positions which snowball bringing the valuation back to reality. I think we see more of these "backfires" as people are sick of propping up large financials and more caution around waiting for stocks to settle. If Uber employees expected it to pop north of $50 they're going to be waiting a while. There's no reason to buy now, risk is high that a few large trades sinks the stock into mid $30s or lower territory. Business Insider had a nice graph that put the valuation into context: https://markets.businessinsider.com/news/stocks/uber-technologies-initial-public-offering-uber-valuation-comparison-2019-4-1028190015 https://markets.businessinsider.com/news/stocks/uber-technol...