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

ROK_Marines's picture
Rank: Orangutan | 270

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

Comments (22)

Mar 25, 2019

Tech bubble af

    • 1
Mar 25, 2019

Seconded - what goes up must come down

Mar 26, 2019

looks pretty bubbly. Not sure we're in the bathtub yet tho

Mar 26, 2019

Link goes to the wrong article, FYI

Most Helpful
Mar 26, 2019

I'm staying far away. This is a pump and dump of epic proportions.

Lyft, unlike Uber, only operates in North America. So how much more can it grow? And in order to compete just in North America, they have to offer big discounts and spend unsustainably on marketing...

    • 3
Learn More

7,548 questions across 469 investment banks. The WSO Investment Banking Interview Prep Course has everything you'll ever need to start your career on Wall Street. Technical, Behavioral and Networking Courses + 2 Bonus Modules. Learn more.

Mar 26, 2019

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.

    • 1
Learn More

7,548 questions across 469 investment banks. The WSO Investment Banking Interview Prep Course has everything you'll ever need to start your career on Wall Street. Technical, Behavioral and Networking Courses + 2 Bonus Modules. Learn more.

Mar 26, 2019

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

    • 1
Mar 26, 2019

Ridiculous yes, but in fairness Google successfully diversified/acquired its way into many profitable ventures. Same with Amazon. Lyft, no way.

How I passed all the CFA Program exams: https://www.youtube.com/watch?v=2DUdnYkojtk&t=37s

Mar 27, 2019

No to Lyft, would you say the same for Uber?

Mar 26, 2019

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.

    • 2
Mar 28, 2019

This is the best stance for why it may not be overpriced i've seen.

Mar 27, 2019

peace

Mar 27, 2019

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.

Mar 26, 2019

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.

Mar 27, 2019

peace

Mar 27, 2019

Bubble of epic proportions far worse than the dot com bubble one. When it pops Bay Area craters tremendously. So much pension money lost.

Mar 27, 2019

Read in the WSJ yesterday that they are burning roughly $800MM on a quarterly basis...

Not sure of a bubble but there's no way in hell I'd put money into this

Mar 27, 2019

I feel like the US economy needs to speed up rapidly to drastically shift the way we do things for this stuff to really make sense.

Mar 28, 2019

I think an important thing to remember that although ride sharing is popular in very dense urban areas, it is not as popular in areas less dense, there are still plenty of smaller cities where a car in necessary and it doesn't make sense to pay $10-20 for every trip you need. In these cities most of the time Lyft or Uber is used for nightlife or large events.

Then when you add in their cash burn and that they are not profitable, they are going to need to continue to spend money to gain customers. And when they have investors demanding they become profitable they are either going to have to cut driver costs, or raise prices (further discouraging users in smaller cities).

Uber will have similar problems but at least they have a larger TAM. It seems to me that Lyft is rushing the IPO process for no other reason except to acquire capital from investors and to be the first ride sharing company to IPO. Rather than being the #2 ride sharing company, it can be the #1 public ride sharing company.

Mar 28, 2019
Comment