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Uber's Losses Reach Double Digits in IPO Debut
- voodooranger 8y agoif everything is a debacle then nothing is a debacle. what word are journalists going to use when there’s an actual debacle?
- duxup 8y agodebacle-gate
- bartread 8y agoWay OT, but that's one of my pet peeves: stop sticking "-gate" on the end of every scandal. Watergate was called "Watergate" because that's the name of the office complex that was broken into. Sticking "-gate" on the end of unrelated words very literally, and perhaps also because it's become such a tired cliche, makes you sound less credible and intelligent.
- hluska 8y agoI’m not OP, but I’d still argue that was meant as a joke. OP was riffing on the media’s sudden overuse of debacle. Now there’s your comment. You missed the point and chose to tell OP they seem less credible and intelligent? That’s not very kind and frankly, people remember kindness far longer than pithiness.
- bartread 8y ago> You missed the point and chose to tell OP they seem less credible and intelligent? Yes, it was a joke, and I think you missed the point. I was agreeing with the poster I responded to, not insulting them.
- hluska 8y ago> Sticking "-gate" on the end of unrelated words very literally, and perhaps also because it's become such a tired cliche, makes you sound less credible and intelligent. If that’s the case, this sentence is very poorly written.
- function_seven 8y agoEh. There’s no such thing as “chocohol” or “workohol” but you know what chocaholic and workaholic mean.
- AndrewBissell 8y agoIn IPO terms, and given the huge amounts of money and valuations involved -- not to mention all the VCs nervously watching and wondering whether they'll get to pass their own cash-burning investments off to public investors -- this is unquestionably a debacle.
- bargl 8y agoTop 10 debacles of 2019.
- jressey 8y agoThis one is certainly a debacle. Uber was the 1 unicorn left. There is no other darling startup that's gonna be scratching $100b anytime soon. This IPO failure ended the crazy run of cash since the '08 crisis. It was also a debacle because anyone who is not an idiot sees that Uber is doomed. You think their little GPS app is actually an advantage with respect to self driving? There is no barrier for entry, none. They are as likely to lose as they are to win, if full automation is actually a viable technology in the next 10 years (it isn't).
- ipsum2 8y agoI thought "unicorn" referred to anything >$1 billion. Slack IPO is rumored to come soon, their last valuation was >$7 billion.
- jressey 8y agoI have heard that but it is my opinion that companies valued >= $1B are becoming a dime a dozen. I work at one climbing that ladder and we could be displaced in 6 months by a better implementation.
- schaefer 8y ago>what word are journalists going to use when there’s an actual debacle? fiasco.
- mathgeek 8y agoBased on past events, likely some pun or other spin on the word "recession" or "apocalypse". I've begun to think that if the media doesn't try to make up a new word or otherwise get you to laugh, it's not yet that big of a story.
- inflatableDodo 8y ago>if everything is a debacle then nothing is a debacle. Most things appear to be in a bit of a debacle right now. Also, to my understanding of debacles, if everything is in a debacle, then everything is still in a debacle, as a debacle is more of a state than a relative term.
- rchaud 8y agoIs there an objective sliding scale that journalists can refer to to avoid making this heinous error? Maybe one that goes like this: - gaffe - snafu - debacle - fiasco - ?
- mimixco 8y agoclusterfuck
- duxup 8y agoSo they raised something like 8 billion (I forget the exact number)? So they have that cash. Are there any immediate impacts for a company regarding a price drop after an IPO?
- AndrewBissell 8y agoOnce they burn the $8B and have to return to the markets for more capital, the terms start to look much worse. It's also pretty bad for employee morale if the only people who get a decent exit from their shares are the VCs & founders.
- bogomipz 8y agoMight you or anyone else know how big their float was on the IPO? Wouldn't the market punish the stock if they went back to the markets for a secondary offering too soon? For that matter what would even would be considered too soon? If they were to sustain their current loss rate wouldn't they have to return to the market sooner than later? Or are there some other instruments available to them that would be preferable to a secondary offering so soon after the IPO?
- danpalmer 8y ago> Are there any immediate impacts for a company regarding a price drop after an IPO? From what I understand, nothing _direct_, but there are a bunch of indirect issues it raises: - Ability to raise later capital - Happiness of current investors (who may have board seats) - Happiness of employees who have stock grants/etc, and may not be making much, if anything... - Retaining talent and hiring new talent Finally, I'm not sure, but I wouldn't be surprised if very significant drops can open a company up to increased auditing or attention from the SEC. I don't know what form this would take, and I could be wrong, but if there is something along these lines that could take up company resources or cost money in fines if they are found to have mis-sold some aspect of the company to investors.
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- jshowa3 8y agoAbout time a profitless company gets what it deserves. I've been concerned with endless VC funding for years. From what I've seen, most current tech companies are not doing well going public. I remember a similar lukewarm response when Snapchat went public. In fact, I probably would've advised them to stay private. Tech companies have seemed to survive indefinitely bleeding VC money. My guess is the stock will probably recover after a couple months.
- fxfan 8y agoUnpopular opinion here but _excessive_ VC funding and valuation are against free-market and hurt the economy and most regular people in the long run.
- human20190310 8y agoWhy would it recover?
- icedchai 8y agoMost "profitless" tech companies do just fine on the public markets as long as they show consistent revenue growth. Take a look at multi year charts for HubSpot (HUBS) and Twilio (TWLO), for example.
- olliej 8y agoThe problem with Uber (and Lyft) is that their losses are also scaling with “growth”. As an alternative take amazon: they made a loss for years and years, but the size of their losses were reducing every year as they grew. The demonstrates a path to profit. Of course for all these companies who have lost value post-IPO have already got the cash they were after. Post-IPO changes to value don’t change that and only impacts people who purchased at the inflated price.
- icedchai 8y agoYes, and the same is true of many of these public SaaS companies. Their losses are increasing proportionally to their revenue, mainly due to huge marketing spend.
- m_ke 8y agoHow long before they get acquired by Amazon? Also what are the chances of that deal getting blocked? Getting all of these uber drivers to deliver packages, groceries and food for amazon customers makes too much sense. EDIT: Looks like Amazon is already making moves in that direction with their own employees https://news.ycombinator.com/item?id=19901196 https://news.ycombinator.com/item?id=19901196
- lalos 8y agoThe drivers are not loyal, they are already on Lyft and whatever app offers them a better deal that day/week/month (depending on incentives they sign on to).
- m_ke 8y agoYes, they're loyal to whoever pays more and has more work. Slapping Amazon deliveries on top of Uber pool would mean more work and better unit economics, which should ideally translate into more money for the drivers.
- darkwizard42 8y agoSurprisingly the background of drivers who do deliveries and food is very different from what is legally required to transport humans. What has been found is that there actually isn't much overlap in competing "supply" as those who are clean on background and DMV checks will always pick transporting people first because its more profitable.
- dractori 8y agoSource?
- rchaud 8y agoThe Uber drivers I've talked to set specific hours for when they're cruising around the city waiting for rides. The Amazon delivery approach would require them to drive from the city, to a remote fulfilment center to pick up goods, and then drive back to the city to deliver them. Is there a different way this can be done?
- andrewla 8y agoI don't know why this is portrayed as a negative -- this is the whole point of an IPO. If the price goes up significantly, it means that the company lost out on capital that it could have raised. If the price goes down, then it means that it extracted more capital from early participants than the market at large thought was justified. It's far preferable, for the company, to be in the second bin than in the first. If they need to raise more capital in the future, then the higher the stock price is the less dilution is needed for the same amount of money, so eventually they want the stock price to recover, but for now they're sitting pretty on top of a pile of cash that they got despite what the market seemed to indicate.
- bob33212 8y agoIf you are looking to liquidate the company, then yes, the goal is to get cash when you can. But if you are looking to create a growth story to attract employees, partners, future investment, you may want people to think there is an upside to the stock.
- AnthonyMouse 8y ago> If you are looking to liquidate the company, then yes, the goal is to get cash when you can. Not liquidate the company, raise money to fund user growth or tech development. > But if you are looking to create a growth story to attract employees, partners, future investment, you may want people to think there is an upside to the stock. In that case what matters is what happens over the next year, not what happens over the next week. If they fell to $20 this week and then stayed there for a month before gradually starting to go back up, all the better for future employees and investors who get to buy in at the lower price.
- ProfessorLayton 8y agoWhile you're right that long-term matters more, you have to think about the short term implications: - People who joined late-stage, and that may have taken a lower salary for the upside once they IPO'd. - Recruiting new people could be come a lot more difficult if the perception is that the stock is worth a lot less. On top of that, after patiently waiting for years that an IPO is going to be when the fruits of their labor are reaped, but no actually it could be much later than that is not likely to help retention.
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- human20190310 8y agoWill a perception that IPOs are now quite risky cause VCs to push for earlier or later IPOs? I can't figure out if it's in their interests to keep funding these companies privately for a longer period, or bite the bullet and push for an IPO sooner.
- dustinmoris 8y agoInvestors want to IPO when they think the time is right to get a high ROI, as soon as possible that might be.
- b_tterc_p 8y agoThey likely want to IPO ASAP in response to expectations of a looming recession.
- edoloughlin 8y agoBefore you continue... Yahoo is part of Oath. [...] Select 'OK' to continue and allow Oath and our partners to use your data, or select 'Manage options' to view your choices. More Oath BS, where Manage Options leads you on a merry dance and does absolutely everything except allow you to manage any options. I'd love to see Oath sites banned from here.
- georgeek 8y agoYes. I am OK with accepting tracking cookies on other sites but I just close the tabs if they I see anything related to Oath as a matter of principle.
- silversconfused 8y agoIt would be nice if paywalled sites and sites with mandatory tracking were banned, yeah.
- nicolaslem 8y agoI always open these links in a private window, accept all the tracking, read the article and close the window.
- yomly 8y agoPiggybacking on this (as I do it too) how robust is this method?
- lesdeuxmagots 8y agoModerately. From a few years ago, I remember Yahoo was still able to triangulate pretty well on whichever device you were using, but had more difficulty across devices. Deduplication was a bit of an art at that point.
- tormeh 8y agoYou've just given them permission to fingerprint you. If they're good at what they do then the private window trick had no effect.
- russellbeattie 8y agoI dislike Uber's corporate culture intensely - enough so that I've used nothing but Lyft for years now. I have no idea how this company has continually gotten away with the crap they've done over the years - from rapant sexism, through privacy violations, to outright law breaking, to manslaughter. No one at the company, nor any of it's investors, deserve to be rewarded with a high stock price. I really hope this company falls, and falls hard.
- lemcoe9 8y agoI am sure I am not alone when I say "thank you" for your list of legal accusations and subsequent evidence/anecdotes/articles/anything to back them up.
- JohnFen 8y agoI agree that Uber is a reprehensible company and I would cheer if they went out of business. Here's a reasonably comprehensive list of their wrongdoing up to 2017. I don't think every item here actually qualifies (for instance, I don't think that Uber can be held responsible for crimes committed by drivers) but it does include most of the more egregious stuff that Uber has engaged in. https://www.businessinsider.com/uber-company-scandals-and-controversies-2017-11 https://www.businessinsider.com/uber-company-scandals-and-co...
- jamesb93 8y agoAre you familiar with search engines? https://www.theverge.com/2017/2/19/14664474/uber-sexism-allegations https://www.theverge.com/2017/2/19/14664474/uber-sexism-alle... https://www.theguardian.com/technology/2018/nov/27/uber-fined-385000-for-data-breach-affecting-millions-of-passengers-hacked https://www.theguardian.com/technology/2018/nov/27/uber-fine... Does it really need to be said about the law breaking? They've been sued so many times it's not funny.
- russellbeattie 8y agoThe vast majority of Uber's Wikipedia page details their history of bad behavior. I didn't even think to provide links as it's well known already and easily discoverable if not.
- danans 8y agoThe steep decline (vs. the market at large) so far today seems like a reflection of an investor flight to security (and away from risk) during a highly volatile situation the stock market. Curiously, another recently IPO'd company, Beyond Meat, is currently up 3.75% on the same day that ride-share companies are down 7-11%, and the market at large is down 3-5%. That suggests that investors at least, have some pretty high confidence in alt-meat companies.
- gumby 8y agoGood job Uber for maximising capital raised for development of the company. Unfrotunately for them (this is not sarcastic) they have built a machine that hasn't had a focus on profit. It's hards to change that after years.
- mrnobody_67 8y agoThat's what every round of VC incentivizes: Here, take our money and spend it in 12-18 months, so you'll need to raise more money from next-round investors and we can mark-up the value of our stock to show to our LPs, so we can raise our next fund and collect more management fees....
- tinus_hn 8y agoThe market as a whole has done really bad during the period Uber has been trading, which is unsurprising as someone is introducing uncertainty in the form of a trade war.
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- outside1234 8y agoIts going to get worse too before it gets better - you know the underwriter was in there manipulating the market the last couple of days trying to prop the stock. When that's gone, look out.
- eganist 8y agoThe same could be said for the Facebook IPO (propped up, etc), but Facebook recovered after they demonstrated success in mobile advertising. Not really offering a counterpoint here so much as I'm saying this has played out in the past with an ending quite a ways different from what's being foreshadowed here.
- bdcravens 8y agoUber could possibly find an opportunity like that by expanding their delivery options beyond restaurants.
- Balgair 8y agoLike bike-messengers, but with vespas and 4-doors? Isn't that a super crowded and niche market anyways?
- mertd 8y agoLast mile logistics is a huge market (FedEx, UPS). On-demand last mile logistics as opposed to once/twice a day delivery is likely a lot smaller.
- treis 8y agoOnly because it's so expensive. There's probably a lot of demand to pay $5 to skip a trip to the store or get food delivered. If Uber gets it to the point where a driver's trip encompasses retail goods, restaurant food, and a passenger at the same time the business looks pretty good. Tough to get there of course.
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- SeeDave 8y agoI consider the Uber IPO to be a 'bookend' on what has been a dozen years of insanity in Silicon Valley. It started off so promising with the sale of YouTube to Google in '06, but it started to feel increasingly 'off' in the early '10s with Groupon and Zynga. Color app was the first canary from my perspective. Again, this is just one guy's opinion but it has been a hell of a spectacle. May we all find chairs when the music stops...
- mimixco 8y agoColor! What a wonderful story of failure. Thanks for the reminder.
- antoniuschan99 8y agoRemember when it raised $50 million and people thought that was a lot of money?
- xrd 8y agoLots of people have commented on this impacting retention of current employees negatively, and that this will make it hard to invite new employees to Uber. Aren't both assertions off base? If I'm a current employee, I'm underwater. And my tax implications are scary. So, am I not motivated to stay and let things recover, rather than walking away when I vest after six months? Like golden handcuffs, but made out of feces or something? Given the alternative, for Uber management, isn't this moment of the stock going down a good thing generally for retaining the big fish at Uber? And, for new people, isn't the calculus for the recruiter pretty easy: hey, jump in now, the stock is really low, get in while you can? Long term this has big implications for Uber if they need to raise a few more billions, but that's a big problem no matter what, right?
- twblalock 8y ago> If I'm a current employee, I'm underwater. And my tax implications are scary. So, am I not motivated to stay and let things recover, rather than walking away when I vest after six months? You have to weigh that against the realistic chance that the stock will never recover. That happened to SNAP and it could happen to Uber too. How long are you willing to wait? You may be doubling down on a sunk cost, and missing out on the opportunity to get a job at another company with more valuable RSUs.
- xrd 8y agoGood point. But if you go anywhere else, you are waiting 18 months for those RSUs. If I stay at Uber for a year and see how things go, isn't that a decision more people will need to make now, rather than doing the math on "I'll leave in six months with new job offer in hand..." In other words, didn't Uber extend the life of lots of people there by a six months or so beyond the six months they need to wait to sell after the IPO? That's a long time in the tech world.
- twblalock 8y agoI think a lot of people will stick around for 6 months, and even longer, and that’s perfectly fine if they want to be there, but it’s not fine if they are staying because they feel trapped by their RSUs and taxes. I’m not saying you should leave. I’m just saying that you should not feel trapped into staying by your RSUs.
- skookumchuck 8y ago> Uber Technologies Inc. shares extended the free-fall on Monday Everything was in free fall on Monday. Nothing noteworthy about Uber going down too.
- slumpt_ 8y agoFound the Uber employee.
- dang 8y agoPersonal attacks aren't ok here. Would you mind reviewing the site guidelines and following them when posting to HN? https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- twblalock 8y agoUber fell about 10-11% and the broader market measured by, say, VTI, fell about 2.5%. Big difference.
- legohead 8y agoHas there been a big IPO that didn't fall? It seems like shorting these is the obvious thing to do, but I admit ignorance when it comes to investing.
- jcranmer 8y agoGoogle's IPO rose from $85 to $100 on its open.
- warp_factor 8y agoThe vast majority of IPOs are successful and pop on opening. Failing IPOs are the exception , not the norm. There were two very high profile failure lately (Uber and Lyft) so I understand why you are feeling so though
- dandare 8y agoWhat is Uber's competitive advantage anyway? Subsidizing rides with Saudi money? The mobile app is pretty simple and competitors are popping up wherever you look. There is almost no cost to switch for the end user and all the taxi companies will end up competing on price. I don't get it.
- chenyangli 8y agoIt's true. There is not any technical bars of ride-sharing app.
- uberdru 8y agoThe public markets aren't particularly efficient, but they can be ruthless in sniffing out irrational enthusiasms.
- golover721 8y agoHonestly everyone needs to chill out. The markets on Friday and today are extremely negative and volatile in general. This was a very tough week to IPO. Market negativity or positivity is amplified with freshly listed stocks. We won't really know what the market thinks of Uber for a few months at least.
- chenyangli 8y agoThe problem is people joining Uber only for becoming rich quickly.
- chenyangli 8y agoUber stock will touch $25