uber ipo is soon what do you guys think
No need to rush into this, the tech and service proposition is very interesting to me but I think it will be super choppy. Might buy in on any big dips just to hold a piece of the future.
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Clivevella1
9 comments
jonesj
Uber is loss making and I cannot envisage it having a sufficiently large moat to make excess profits in the future.
Whilst it has the benefit of a network effect, a global network is totally unnecessary and competitors could easily set up in any large town or city as they please.
For example, I was in Phnom Pehn in December, where there were a few Tuk Tuks with the Grab logo on the side, but it quickly became apparent that most of them had the "Pass App" logo. I downloaded Pass App and found it actually worked better than Grab. So if Uber ever start taking too big a cut of the pie, I think it would be very easy for a local company to set up in a specific city.
One final point. If I am to pick individual stocks, then Ideally I want to try and identify a stock that is incorrectly undervalued. Trying to do that in the world's largest and allegedly most efficient market doesn't make sense to me.
jared007
I have no interest myself. I watched the Lyft IPO the other week which is a direct competitor to Uber. The IPO did well on first day up 20%, but it's been deeply down ever since. Buying into an IPO just for the sake of getting in at the start is more aligned to gambling than investing.
If on the other hand you have been watching Uber, like the business model and believe there is growth then that's an educated reason to get in. For myself, I feel there are so many other opportunities out there to buy shares in at present (I always have about 20 stocks on the watch list that I really like). I'm interested to see how the market goes for Uber, but I'm on the sidelines.
William K
I use Ubers all the time when I"m in London. They provide an excellent and relatively cheap service that is totally focused on the passenger. Ten out of ten for that. But they've been around since 2009, and if they can't make a profit by now, I don't see that they have any prospect of their making a profit in the near future. For that reason I'm to not investing. As others have already pointed out, there are much better opportunities in the market currently available.
andrewdb
On IPOs generally,
istr that there is research out there that indicates that post ipo, the share price tends to underperform the market for the first 3 years on average.
On uber itself, what jonesj said and would note
- they dont seem to be doing that brilliantly in india / asia
- european regulators are waking up and reducing their ability to exploit legal 'gaps'
- a lot of the guidance on stocko is to not get sucked into 'blue sky' loss making 'jam tomorrow' stocks. Uber makes big losses.
- uber's current 'jam tomorrow' is the prospect of autonomous taxi fleets. This is not happening any time soon.
There are a number of good articles on FT Alphaville.
So I would sit out.
Would I go short... ...no. I don't have the nerve.
Zoiberg
Bargepole. Uber are popular because they are cheap (when they are not surge charging). A probable consequence of now having to please the market (i.e. cease being massively loss making) is that fares will go up. I don't see any investment proposition here.
back2value
To my mind, buying Uber shares would be to reward the original investors for their failure to establish a viable business, despite a first mover advantage, years of trying and billions of dollars.
If this was any other sector apart from headline-making big tech, this would have been killed off a long time ago.
B2V
timarr
Uber is impossible to value, there are simply too many moving parts (tish boom!).
But it's not a taxi replacement company, it's a combination of a tech company and a logistics operator. Over the next twenty years we're going to see some form of revolution in the way we travel. I have no ability to predict what the outcome of that will look like, and distrust anyone who claims to be able to do so but it's going to involve a complicated mix of electric vehicles, ride sharing, pay-to-drive and integrated over-the-top Mobility as a Service operations providing methods of delivering door-to-door journeys without requiring car ownership. All of these things are already happening, but far more slowly than everyone involved would like.
Reading the IPO, I'm struck by the wide range of risks that they're faced with but interestingly their expectation is that their relationship with their drivers will get worse as they scale back on driver incentives in order to focus on the bottom line. The ultimate aim, obviously, is to replace drivers entirely but that's more than a few years away. So the ride is likely to be bumpy (Ed: stop it).
I can't say I'm tempted by the IPO but this is the kind of company that's likely to make predictions look foolish. Like a lot of platform companies it simply doesn't fit in any pigeonhole, and will cause analysts waking nightmares trying to value it. Investing in blue sky stocks is a quick way of losing money - but if you are that way inclined, this is the type of stock to do it with as long as you're willing to endure wild changes in valuation along the way.
timarr
Albertos
The bears have it at the moment with Uber falling 7% today, its first day of trading. Having said that Lyft also fell 7% today (now fallen 27% since IPO).
