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Well guys officially the uber ipo has happened and it has been an absolute disaster i want to go ahead and talk about this uber ipo why it has been such a disaster and i want to talk about if i’m interested in buying the shares here and now guys so hope you enjoy this as always make sure you hit that thumbs up but let’s start getting into this guys so if you remember
Back in october of 2018 okay what is that you know eight months ago or so basically uber was talking about going public at a valuation of around a hundred and twenty billion dollars and this was thought to be the something that what might happen you know and basically then after that the markets got really weak in november and december obviously the stock market had
A really rough time and then you know uber started to have maybe some thoughts about when they do go public which was possibly in this spring maybe it was for a little less valuation and then all of a sudden we fast forward to april and uber was starting to talk about a valuation of up to a hundred billion dollars and that’s in april this year so between october
2018 in april of 2019 basically uber this is valuation they brought it down by about twenty billion dollars okay so that’s a massive massive difference and in a very very short amount of time but the main reason why huber brought down that valuation was because of how bad the lyft ipo in if you didn’t know lyft is their main competitor lyft ipo went ahead and
Happened just a couple months ago and that ipo at first looked like it was going great okay so lyft went public with the valuation of just over twenty two billion keep in mind lyft is a very tiny company if you compare it to her they’re a fraction of the size so lyft a much smaller player but they went public for at about twenty two billion the first day training
Went fairly well overall but since that time it has been a disaster for lyft stock okay so ipos around eighty seven dollars roughly somewhere around there that first day and then you fast forward now which is basically they went public at the end of march now we’re in about mid may and where’s the stock it’s at fifty two dollars so the stock went from eighty seven
Dollars where it went public less than two months ago to now the stock is trading at fifty two dollars that is an absolute disaster of an eye pío usually when a company goes public for anything they want to see the stock price going up over time to have it go down and not just down but in that dramatic of a fashion is it’s insane okay so this made uber start to
Think you know what maybe we should bring down our valuation even more okay so here we go very recently just as a couple weeks ago uber was talking about going public with possibly a ninety billion dollar valuation and this was as uber drivers we’re playing the strike and i believe some lyft drivers did as well so then they were talking about okay maybe around
90 billion is about right yeah a few months ago we were thinking about 120 billion then we were thinking about a hundred billion then lift happened now we’re thinking about 90 billion ah you know what now maybe we should even bring down that valuation to about 80 billion dollars okay so now keep in mind this isn’t just like uber making this decision okay this is
Uber the investment bankers investment world kind of talking about what the demand could be you know what uber’s true valuation should be in all those sorts of things okay so now we’re in a situation where literally a few months ago is 120 billion dollar valuation now all maybe 80 and then we get to today the day the company actually goes public and what valuation
Does the company end up going to look like that okay so over begin trading on the new york stock exchange friday at $42 per share below its ipo price of $45 let me stop it right there that is very rare okay it’s very rare for companies that go public for their shares to trade initially lower than basically what the ipo dad okay that’s all that’s just a very very
Bad sign in general okay especially when the stock couldn’t even open up okay the stock was down more than 4% toward the start of trading uber prices shares thursday night toward the low end of its target range of $44 to $50 per share and as you know we just talked about this trading at $42 right now so it’s trading literally lower than their lowest target range
Okay that gave ober evaluation of seventy five point four six billion at its ipo on an on who to share basis still well below the hundred and twenty billion it was reportedly seeking just a few months ago okay for the beginning of trading ubers market cap was around seventy two billion guys so think about this this is just crazy okay one hundred and twenty billion
Dollar valuation talking about just a few months ago and it was like yeah that probably go public somewhere around there and today you can pick up the company for about a seventy two billion dollar valuation massive massive difference okay no you don’t part of this i could blame on the markets in general this week obviously it’s been a bad week for the markets and
The markets are pretty weak to date but it’s not like the market is a disaster today it’s not like you can say well the stock mark is an absolute disaster day that’s why the stock is down no the stock market is down today but you know if the stock market has down days all the time with any companies go public and usually it works out but here an uber situation it’s
Obviously just been in a complete disaster basically before the company went public to keep bringing down your valuation from 120 billion then it’s like oh hundred then ninety then eighty then you go public in the seventy-five and now the stocks trading at seventy two billion dollar valuation that’s that’s a this is obviously a showing of weak demand for people
Wanting to buy shares out there okay now like lift the ceo said 2019 should be the company’s peak year for losses all right uber has come even comparing itself to amazon in its pitch to investors which also in famously was not profitable at its ipo while some analysts are dubious of the comparison they also recognize investors fear of missing out on the next big
Thing in the cnbc interview the ceo said he stands behind the company’s comparison despite the differences between the two companies at their ipo and you know man you know everybody wants to compare themselves to the great okay every football player that gets drafted they want to compare them so the great already okay are the announcers or whatever it’s just the
Way it works in you got uber here trying to compare themselves with ipo and i will say is dramatically not just dramatically different business models but dramatically different at the stage of ipo you know eber although they brought down their valuation not mad of amount over the last few months still talking about company has a 72 billion dollar valuation as
Of right now right in a company that is a very very big company as of right now amazon the other hand would amazon would public this was a teeny tiny company they had under 16 million dollars in revenue okay an amazon had a valuation of around 300 million dollars roughly okay so these two companies were dramatically different in i peeled personally when i look at
Amazon and i look at uber i don’t like the comparison there in my personal opinion okay and you think about even the business models very different business models obviously ubers a very you know asset light business model where they don’t own the cars they don’t own the drivers in a home really anything okay whereas amazon you think about amazon they have these
Massive warehouses you don’t a massive amount of these massive warehouses right all over the world these are owned by amazon right you think about the employees is there you know direct employees of the amazon that come to work every day right whereas we think of ubers business model and it’s like you know where will they even be that many employees in the future with
Autonomous vehicles and things like that two very very very different business models and you think about even amazon web services and all infrastructure they own for that right once again very very different business model in my personal opinion than uber i don’t think they should be i don’t think they should be compared at all just because the business models are
Massively different and on top of that though the when they went public they’re just two totally different companies the amazon was a teeny tiny company and then ubers a massive goliath company okay so they should not be compared in my personal opinion other than oh they were both unprofitable when they went public so aren’t like like half these companies or more
Than half these companies that go public are not making money okay so if i’m looking at uber stock is it a stock i’m interested in buying at this point in time okay so if we think about uber business model in general they’re they’re kind of you know they have a few different businesses but at the end of the day like my mind automatically shifts to kind of uber is
Obviously the ride-sharing business right and that’s a massive business and especially in big cities like i when we went on vacation to san francisco that was what a month or two ago i saw the power of uber and like going to san francisco for instance because we drove a vehicle to san francisco and we almost never drove that vehicle it was way more convenient and
Arguably maybe even cheaper because how much parking rates work for us to take uber is everywhere and i think we took 14 of 16 overrides in a matter of just a few days we were there okay so over made you know a lot of money off us in a very quick amount of time and i kind of got to see the power of uber and you know here in las vegas maybe you could take uber is
On the strip but for the most part you know most people own cars so you don’t really see the need to have a service like uber hear you at all because it’s like the suburbs and you know you drive a long way to go to pretty much anywhere san francisco is so congested you could see the power in these big congested cities you see the power of uber then not only that
I kind of think about uber eats which is a very intriguing service which is already a food delivery service and the question is who’s gonna be number one in food delivery that’s gonna be a massive market going in the future who’s gonna be number one there i think uber has got a great opportunity to be the number one playing there player there so then there’s a few
Other businesses uber has going and things going around internationally and whatnot which is exciting but i’m kind of thinking about their ride-sharing business in the developed world mostly and i’m mostly thinking about uber eats over all so if i’m looking at uber very intriguing business model to me very intriguing company possibility that i could buy ober sheriff
At some point in time as kind of a spec play okay kind of a speculative play now they’re a massive company to be a spec play but at the end of the day they don’t make money so i consider it a spec play okay i could kind of look at this as i own tesla shares obviously if i owned ober and i owned tests up then i kind of own the two companies that are probably gonna
Be the main players in my personal opinion of autonomous driving in the future in this whole ride-sharing ability and whatnot i think likely they i think these two companies have a great opportunity to win that i think tesla is a great opportunity to kind of be the number one other than if i’m looking at number two i’m looking at uber z’ experience in this and as
Long as they could partner with somebody that’s got full autonomous you know vehicle you know capabilities and whatnot i think uber could possibly be you know a massive number two and those could kind of be like the two main players so it’s a possibility i could go ahead and buy some uber shares here i’m much more interested now that the valuation has come down
Considerably then now and maybe it makes sense for me to go ahead and say hey at a 77 billion dollar valuation maybe it’s worth picking up some shares this kind of aspect play once again they’re losing money and they probably won’t make money for at least to the next i would say at least the next two years i wouldn’t expect them to make money but just because
They don’t make money right now doesn’t mean they’re not gonna make a lot of money in the future now if i do look at their business model it is a business model i could see them making a lot of money in the future why because there’s only one other main competitor right now it’s lyft so over time uber and lyft are gonna be able to raise prices substantially i’d
Like it’s just very obvious to see same things gonna happen in food delivery there’s gonna be two or three main players there and then costs in and obviously they’re gonna start you know rolling in the profit cuz they’ll be able to kind of raise prices a bit they’ll be able to kind of figure out that business model what’s the best way to do it and whatnot and you
Know then there’ll be a very profitable business in the future and my personal opinion it’s gonna take a few years to get there so yeah i might buy it as a spec play guys we’ll have to see i i might kind of like that that combination of having some tesla shares and copying some uber shares that’s kind of my more speculative place two very big companies that are
Doing big things already so they’re much less speculative than mostly spec stocks out there so i don’t know guys we’ll have to see i’ll update you if i do buy some uber shares i’m much more interested i 120 billion dollars not interest at all seventy billion maybe it’s worth me even picking up a little bit of shares guys so i hope you enjoyed this as always be sure
To check out the other channel financial education too i got some videos coming tonight on that channel alright thank you for watching and have a great day
Transcribed from video
Uber IPO Stock Disaster.. Will I Buy Uber Stock Now?! By Financial Education
