Lyft IPO to be valued at $23 Billion; a Tech Bubble?

Lyft has beaten Uber to the punch on their IPO fillings; Lyft is expected to go public in coming week and is approximately valued around $23 Billion.

The company expects to be valued at as much as $23 billion. It plans to sell about 35.4 million shares, including the additional shares allotted to the underwriters, at between $62 to $68 a piece. At the high-end of that range, it will raise $2.4 billion. - a quote from this article

Do you think there is a tech bubble on the rise after Lyft's IPO valuation? How about Uber's IPO? Curious to hear monkeys' thoughts

 

The logic is to only get "serious investors" to finance the business and keep them invested. They easily could have priced this thing in around $15-$20 a share.

Uber is the better deal, but we all will have opportunities to purchase both Lyft and Uber at much lower discounts 12-24 months from IPO day.

Pinterest is an interesting one, because of their search engine capabilities for non-branded items...I want to get in but I haven't narrowed it to a $ range yet, might stay on sidelines for the first month.

 

perspective is key, let's look at some actually successful companies and what they did at IPO

Visa, 1H2008 - $58bn market cap at IPO, >10x revenue Google, Fall 2004 - $23bn market cap at IPO, 59x revenue Amazon, 1997 - $438mm market cap at IPO, 27x revenue

I completely agree, these numbers are ridiculous, but they're par for the course for the IPO market

 

I disagree. Transportation as a Service is an absolutely enormous opportunity and Uber / Lyft are the only players of scale in N.A.. Ridesharing accounts for less than 1% of total miles traveled and is expected to continue to gain share as urbanization trends continue and fewer consumers purchase cars. To add to the strong tailwinds, these businesses are easily scale-able, are household names, and the ridesharing aspect is only the beginning of the overall platform.

 

Question for you: If you own a car, are you planning to sell it and do all future car travel via ridesharing? Or do you know anyone who does own a car with such plans?

If the answer to either or both questions is "no" then the actual TAM is smaller than Lyft and Uber would have you believe.

 

A. Look at car ownership trends B. Look at urbanization trends

The investment thesis isn't that everyone drops car ownership and/or strictly uses ridesharing. It's a $1.2 trillion industry that is in the early stages of a dramatic disruption - a marginal shift towards ridesharing is a substantial $ value. Once Uber / Lyft controls the customer, they can pivot into several other segments within the TaaS market.

 

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