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So I think people may be misinterpreting this drop: lock up expired today, so the sales today -- throughout the day -- are a result of the lock up expiry. Thi

So I think people may be misinterpreting this drop: lock up expired today, so the sales today -- throughout the day -- are a result of the lock up expiry. This pre-market drop is the result of people anticipating the drop and selling before the market opens. It is also, partly, driven by the disappointing earnings from 3 days ago, and indeed the drops over the last few days have been about as large. For what its worth, shares are slightly up from the open.

semiotagonal 7y ago
I'm surprised it isn't much lower. Maybe people holding the stock are too "pot-committed" to sell at this point?
- omarhaneef 7y ago
  I hate to be glib about valuations. There are a few people out there who have done the hard work: http://aswathdamodaran.blogspot.com/2019/04/ubers-coming-out-party-personal.html http://aswathdamodaran.blogspot.com/2019/04/ubers-coming-out... https://www.forbes.com/sites/greatspeculations/2018/02/22/breaking-down-ubers-valuation-an-interactive-analysis/#161fe27e4785 https://www.forbes.com/sites/greatspeculations/2018/02/22/br... And Bloomberg had a good one, though I can't find it now. I am not endorsing any of these, but the difference between a bull and bear (or, if you will, a valuation higher than what we have and lower than what we have) is probably how much you think additional business are worth. So if you think that food delivery, logistics etc will amount to a large, valuable business, I think you are bullish.
- deminature 7y ago
  Price targets from almost every analyst after Q3 earnings is $>40. If you believe that, you'd be making a mistake selling.
  - bhupy 7y ago
    Do you have a link to these analyses?
    - deminature 7y ago
      https://www.tipranks.com/stocks/uber/price-target https://www.tipranks.com/stocks/uber/price-target
      - semiotagonal 7y ago
        Their "low" forecast is significantly higher than the current price. I'm skeptical.
        deminature 7y ago
        Skepticism is entirely warranted, I was just pointing out that there seems to be some unanimity amongst analysts about undervaluation currently.
streetcat1 7y ago
The post lockup sale was already "priced" into the share price a month ago (or even before). The market react only to NEW information. In general, it is impossible to know what is priced in or not.
- omarhaneef 7y ago
  By your logic, it should have been priced in at IPO, since we knew back then that it would happen. However, note that back then we also didn't know what else was going to happen. We didn't know if earnings would go up or down, or a lawsuit would emerge etc. After earnings (a few days ago), we had a "purer" expression of the effect of the lockup expiry. In other words, we had the information but there was also a lot of noise at IPO (or a month ago etc).
  - streetcat1 7y ago
    You are correct. Everything is priced in, alas, with probability of occurrence. If you look at option pricing the probablity is part of Black & Scholes formula. Also, the market did not know about earning,this is a surprise information (or it should be). I would also argue that the market priced in new information within milliseconds.
  - erikpukinskis 7y ago
    All timescales happen simultaneously on the market. So there is a slice of the market that’s priced how you say: IPO plus many years. There’s another slice that’s priced on the day’s expectations, another slice on the quarter, etc. How big each slice is varies per company. But OP is correct that for all slices that contain yesterday, yesterday is priced in. Which includes all slices that were in the order book yesterday. Some people did get out between IPO and yesterday, and they would not have priced yesterday at IPO.
    - streetcat1 7y ago
      All timescales do happen, however, the actual share price (the last trade) is decided by the very very short term order book, which is very sensitive to new information.
ganitarashid 7y ago
Slightly up from the open but still down majorly from yesterday. Are you in marketing?
- omarhaneef 7y ago
  The purpose of that distinction is to tease apart the effects of the lock up expiring from other effects (anticipation of the lockup expiry and after effects of the earnings call). It is not to render some verdict on the one true value of Uber.

semiotagonal 7y ago

I'm surprised it isn't much lower. Maybe people holding the stock are too "pot-committed" to sell at this point?

omarhaneef 7y ago
I hate to be glib about valuations. There are a few people out there who have done the hard work: http://aswathdamodaran.blogspot.com/2019/04/ubers-coming-out-party-personal.html http://aswathdamodaran.blogspot.com/2019/04/ubers-coming-out... https://www.forbes.com/sites/greatspeculations/2018/02/22/breaking-down-ubers-valuation-an-interactive-analysis/#161fe27e4785 https://www.forbes.com/sites/greatspeculations/2018/02/22/br... And Bloomberg had a good one, though I can't find it now. I am not endorsing any of these, but the difference between a bull and bear (or, if you will, a valuation higher than what we have and lower than what we have) is probably how much you think additional business are worth. So if you think that food delivery, logistics etc will amount to a large, valuable business, I think you are bullish.
deminature 7y ago
Price targets from almost every analyst after Q3 earnings is $>40. If you believe that, you'd be making a mistake selling.
- bhupy 7y ago
  Do you have a link to these analyses?
  - deminature 7y ago
    https://www.tipranks.com/stocks/uber/price-target https://www.tipranks.com/stocks/uber/price-target
    - semiotagonal 7y ago
      Their "low" forecast is significantly higher than the current price. I'm skeptical.
      - deminature 7y ago
        Skepticism is entirely warranted, I was just pointing out that there seems to be some unanimity amongst analysts about undervaluation currently.

streetcat1 7y ago

The post lockup sale was already "priced" into the share price a month ago (or even before). The market react only to NEW information. In general, it is impossible to know what is priced in or not.

omarhaneef 7y ago
By your logic, it should have been priced in at IPO, since we knew back then that it would happen. However, note that back then we also didn't know what else was going to happen. We didn't know if earnings would go up or down, or a lawsuit would emerge etc. After earnings (a few days ago), we had a "purer" expression of the effect of the lockup expiry. In other words, we had the information but there was also a lot of noise at IPO (or a month ago etc).
- streetcat1 7y ago
  You are correct. Everything is priced in, alas, with probability of occurrence. If you look at option pricing the probablity is part of Black & Scholes formula. Also, the market did not know about earning,this is a surprise information (or it should be). I would also argue that the market priced in new information within milliseconds.
- erikpukinskis 7y ago
  All timescales happen simultaneously on the market. So there is a slice of the market that’s priced how you say: IPO plus many years. There’s another slice that’s priced on the day’s expectations, another slice on the quarter, etc. How big each slice is varies per company. But OP is correct that for all slices that contain yesterday, yesterday is priced in. Which includes all slices that were in the order book yesterday. Some people did get out between IPO and yesterday, and they would not have priced yesterday at IPO.
  - streetcat1 7y ago
    All timescales do happen, however, the actual share price (the last trade) is decided by the very very short term order book, which is very sensitive to new information.

ganitarashid 7y ago

Slightly up from the open but still down majorly from yesterday. Are you in marketing?

omarhaneef 7y ago
The purpose of that distinction is to tease apart the effects of the lock up expiring from other effects (anticipation of the lockup expiry and after effects of the earnings call). It is not to render some verdict on the one true value of Uber.