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I mean... paper losses. It's going to take more than a few days of trading to figure out whether anyone lost money here. I'm sure none of those institutional

I mean... paper losses. It's going to take more than a few days of trading to figure out whether anyone lost money here. I'm sure none of those institutional investors were looking at the IPO as their liquidity event.

toomuchtodo 7y ago
What's the lockup period for employees? Six months? Is it likely the stock of a company that isn't profitable (except in a few markets) and is rapidly burning through cash reserves is worth more in six months than it is today? Their marketed value isn't on being a profitable cab service in a few major markets, they argue they're taking over the world of mobility (which is obvious they aren't and can't). Disclaimer: Armchair investor, intend to buy puts when they're available on the hunch there are no further greater fools to buy UBER
- netcan 7y ago
  Generally speaking, the stock price today is the best indicator of the stock price tomorrow. Investors know that uber is not profitable and it's expected to be that way in 6 months too. The stock could do good or bad over those 6 months. Shares/options are risky.
  - deleted 7y ago
    [deleted]
  - toomuchtodo 7y ago
    Shares are risky. Options (in general) are not, as only the premiums you pay are at risk (versus unlimited risk with shorting shares).
    - netcan 7y ago
      That's like saying lead balls are lighter than rubber ones because they're smaller. The value at risk is the size of the investment.
    - plouffy 7y ago
      Not unlimited. Your losses shorting a stock are capped at the price you borrowed it for (though technically it could be unlimited if you have to continue paying borrowing costs if you can't buy a share and close out your short [1]). [1] https://www.bloomberg.com/opinion/articles/2018-04-11/-go-to-zero-isn-t-great-for-short-sellers https://www.bloomberg.com/opinion/articles/2018-04-11/-go-to...
      - toomuchtodo 7y ago
        There is no limit to how high the price of an equity to go, which is where your unlimited liability comes from.
      - SEJeff 7y ago
        I do wonder why you're being downvoted. Regarding a naked short, you're entirely correct in this ^
      - peterbraden 7y ago
        Wrong, you owe the stock, not the purchase price.
- Bartweiss 7y ago
  Theoretically, the answer to that (and most things) is "the market should already have priced that in". Since we all know Uber isn't profitable and is burning cash, that shouldn't lower the stock price in the future. Given that, the value of Uber is dependent on the belief that they can change that situation. If their burn rate is better in six months (even while staying unprofitable), the stock presumably rises. If it's worse or even the same, the stock presumably drops as people lose hope. More practically, there were probably a bunch of people playing 'greater fool', and a modest contraction after the hype looks standard for big tech IPOs at the moment.
onetimemanytime 7y ago
Paper loses...if the stock increases. Uber already was valued at $80 BILLION, it takes a lot of money and feet in the ground to increase revenue and share, it's different from Google and FB.
- FactolSarin 7y ago
  As of right now, the stock price has dropped even further to $37. This is a brutal day for Uber stock holders.
- pmart123 7y ago
  I think that is part of the big disconnect between private and public markets. The public market has been valuing simplicity in business models lately with old conglomerates like GE, Honeywell, Phillips, and UTX selling or spinning off units. The private market has been valuing potential and multi industry domination to some extent. Some companies like Apple, Amazon, and Microsoft have been able to have multiple avenues, but this has come after multiple successes, and what I would classify as cleaner underlying objectives. At this moment in time, Uber and Lyft would be better served proving the underlying unit economics work to receive a better public market price. I think if both could show meaningful progress in this regard, it would help stabilize their stock prices.
- burnte 7y ago
  > Uber already was valued at $80 BILLION yes, but remember, that's a valuation based on how much of the company was sold off and for how much. $80bn hasn't been poured into Uber, just a fraction of that. Still way too much, but nowhere near $80bn.
DogOnTheWeb 7y ago
FTA: "The opportunity cost is even greater: Investors in the S&P 500 have seen their money grow by 50% over the same period." At this point, any retail investor can buy into Uber and experience better returns (or fewer losses) than post-2016 investors and staff.

toomuchtodo 7y ago

What's the lockup period for employees? Six months? Is it likely the stock of a company that isn't profitable (except in a few markets) and is rapidly burning through cash reserves is worth more in six months than it is today? Their marketed value isn't on being a profitable cab service in a few major markets, they argue they're taking over the world of mobility (which is obvious they aren't and can't). Disclaimer: Armchair investor, intend to buy puts when they're available on the hunch there are no further greater fools to buy UBER

netcan 7y ago
Generally speaking, the stock price today is the best indicator of the stock price tomorrow. Investors know that uber is not profitable and it's expected to be that way in 6 months too. The stock could do good or bad over those 6 months. Shares/options are risky.
- deleted 7y ago
  [deleted]
- toomuchtodo 7y ago
  Shares are risky. Options (in general) are not, as only the premiums you pay are at risk (versus unlimited risk with shorting shares).
  - netcan 7y ago
    That's like saying lead balls are lighter than rubber ones because they're smaller. The value at risk is the size of the investment.
  - plouffy 7y ago
    Not unlimited. Your losses shorting a stock are capped at the price you borrowed it for (though technically it could be unlimited if you have to continue paying borrowing costs if you can't buy a share and close out your short [1]). [1] https://www.bloomberg.com/opinion/articles/2018-04-11/-go-to-zero-isn-t-great-for-short-sellers https://www.bloomberg.com/opinion/articles/2018-04-11/-go-to...
    - toomuchtodo 7y ago
      There is no limit to how high the price of an equity to go, which is where your unlimited liability comes from.
    - SEJeff 7y ago
      I do wonder why you're being downvoted. Regarding a naked short, you're entirely correct in this ^
    - peterbraden 7y ago
      Wrong, you owe the stock, not the purchase price.
Bartweiss 7y ago
Theoretically, the answer to that (and most things) is "the market should already have priced that in". Since we all know Uber isn't profitable and is burning cash, that shouldn't lower the stock price in the future. Given that, the value of Uber is dependent on the belief that they can change that situation. If their burn rate is better in six months (even while staying unprofitable), the stock presumably rises. If it's worse or even the same, the stock presumably drops as people lose hope. More practically, there were probably a bunch of people playing 'greater fool', and a modest contraction after the hype looks standard for big tech IPOs at the moment.

onetimemanytime 7y ago

Paper loses...if the stock increases. Uber already was valued at $80 BILLION, it takes a lot of money and feet in the ground to increase revenue and share, it's different from Google and FB.

FactolSarin 7y ago
As of right now, the stock price has dropped even further to $37. This is a brutal day for Uber stock holders.
pmart123 7y ago
I think that is part of the big disconnect between private and public markets. The public market has been valuing simplicity in business models lately with old conglomerates like GE, Honeywell, Phillips, and UTX selling or spinning off units. The private market has been valuing potential and multi industry domination to some extent. Some companies like Apple, Amazon, and Microsoft have been able to have multiple avenues, but this has come after multiple successes, and what I would classify as cleaner underlying objectives. At this moment in time, Uber and Lyft would be better served proving the underlying unit economics work to receive a better public market price. I think if both could show meaningful progress in this regard, it would help stabilize their stock prices.
burnte 7y ago
> Uber already was valued at $80 BILLION yes, but remember, that's a valuation based on how much of the company was sold off and for how much. $80bn hasn't been poured into Uber, just a fraction of that. Still way too much, but nowhere near $80bn.

DogOnTheWeb 7y ago

FTA: "The opportunity cost is even greater: Investors in the S&P 500 have seen their money grow by 50% over the same period." At this point, any retail investor can buy into Uber and experience better returns (or fewer losses) than post-2016 investors and staff.