from Hacker News

Lyft prices IPO at top of range

by jkw on 3/28/19, 9:48 PM with 329 comments

• by jedberg on 3/28/19, 10:19 PM

  A fun lession in dilution:

  Logan Green and John Zimmer, the co-founders of Lyft, will each have about $500M in stock at $72.

  (Edit: I miscalculated the holdings of the cofounders at $85M because I didn't account for their class B shares. However, I think my point still stands for the most part).

  Google holds $900M in Lyft stock. A16Z holds $1B in Lyft stock. GM and Fidelity have $1.3B. Rakuten Europe has $2.2B.

  $500M is certainly a life-changing outcome, but it's interesting how we value the capital that those companies put in far more than we value the years of work those two put in.

  Edit 2: To be clear, this isn't a complaint in any way. What A16Z and Google and the rest did for Lyft is highly valuable and worthy of compensation.

  This is simply a commentary on the relative value of capital vs labor.

• by warp_factor on 3/29/19, 7:13 AM

  Uber and Lyft IPOs look to me like they are legal ponzy schemes.

  Both companies lose a crazy amount of money, they have close to zero moat, customers have no loyalty and will go to another rideshare service if it is one dollar cheaper. The fundamentals don't make any sense, but still we read everywhere that Lyft and Uber at those prices make sense.

  The VCs and founders decided to get out while the market is up (and while they still can) and they will sell their shares to the "dumb" public that will buy into another overhyped tech stocks without really understanding the fundamentals. The employees cannot sell before 6 months, they are locked out.

  After a couple weeks the market will probably realize this stock is overvalued and it will start to go down, but at that point all the big fishes will be out already and who will hold those toxic assets? individual investors and employees that cannot yet sell.

• by justfor1comment on 3/28/19, 11:59 PM

  I will have to get a driver's license if this thing crashes. I am part of the problem why Lyft and Uber lose so much money. I have been so lucky that Uber and Lyft became ubiquitous just when I was about to get a DL. I decided against the headache and costs of maintaining my own car. Never got a DL and kept using ride sharing services everywhere. Also, kept switching between Uber and Lyft based on who is offering me discounts that week. Seems like my VC funded lifestyle will come to an end if some new investors don't buy the ride sharing story.

• by DevX101 on 3/28/19, 10:40 PM

  Anyone else reading the rush to IPOs from so many companies as a leading indicator of a market top?

• by komali2 on 3/28/19, 10:04 PM

  My friends own a flat in downtown San Francisco, about a 30 second walk from the 4th and King station. They're waiting till the middle of this year to sell because of the expectation of many new millionaires seeking property after the Lyft, Uber, slack, and other IPOs.

• by lordnacho on 3/29/19, 7:47 AM

  Well I don't want to poop on the parade, but isn't it a little bit thoughtworthy how rewards are distributed in our modern economic system?

  A company that hasn't made money is making its founders generational wealth, as well as the investors. (Actually is this wrong? Googling seems to suggest they lost money in recent years. Point is the same though.)

  Lyft might never make money, and yet people involved are making out like bandits. I get that some things will lose money before they make money, and it's not up to me to decide whether a particular thing should be invested in by other people.

  But it seems if this trend continues, making money becomes more about getting investors to think they're gonna make money than about making a profitable business?

• by samfisher83 on 3/28/19, 11:10 PM

  How is a company that makes no money in a commodity business worth so much. FB and Google had a monopoly. What moat does Lyft have to justify the valuation (24B)?

• by blegblarh on 3/28/19, 11:29 PM

  Does anyone here rely on Lyft or another rideshare for their business? I work for in the healthcare sector and we rely on rideshare quite a bit to ensure our members can reach their doctor's appointment, etc.

  I would say around 50% of our trips are rideshare and the rest are local transportation companies; While Lyft isn't perfect I can't help but wonder if they are going to alter operations greatly whether it is to phase out their healthcare operations or buy us out.

  I am curious if anyone has some insight as to how Lyft plans on continuing their operations.

  Here is a link to some of the services Lyft offers if you are curious: https://www.lyftbusiness.com/healthcare

• by hnburnsy on 3/29/19, 12:26 AM

  Is Lyft losing money because they are offering a service below cost or because they are spending on marketing to acquire and protect market share? One seems unsustainable and one seems manageable.

• by cleandreams on 3/28/19, 10:25 PM

  I'm worried about the impact of collapsing valuations of Lyft and Uber. Out of curiosity, does anyone know what big successful companies have gone public when they were losing large amounts of money? What happened to the stock price?

• by throwawaylogs on 3/28/19, 10:14 PM

  I don't mean to be super negative but I don't see this going well.

  They are losing a billion a year and have the worst self driving tech.

  Their self driving tech is built on top of Baidu's open source platform and another open source platform with only 1 year of development with a huge team. A recipe for disaster.

  They only have 1 year of development and scant few of their technical leaders - including their VP - worked in self driving before starting at Lyft.

  I don't see how they survive.

• by whoisjuan on 3/28/19, 10:35 PM

  Just wait one year. After two or three earnings releases its market cap would be under $10B.

• by dnate on 3/29/19, 10:08 AM

  I'm not too knowledgeable when it comes to finances. But isn't it possible to bet against a stock? As in someone promising you to buy stock X at price Y at future date Z? So when the stock dips, you make money.

  If yes, and this is such a clear cut case (again, I know very little about finances, just going of the comments here), shouldn't this be easy money? Hell, I would bet against it if I had any betting money.

• by klaudius on 3/28/19, 10:24 PM

  I suggest everyone read Hubert Horan series on NakedCpitalism. Here's the latest article: https://www.nakedcapitalism.com/2019/03/hubert-horan-can-ube...

• by sparkling on 3/29/19, 8:13 AM

  Can anyone explain why Uber needs 16.000+ employees (this figure does not include drivers)? I don't see why the whole operation can't be run by ~1000-2000 people.

• by josh_carterPDX on 3/28/19, 10:39 PM

  90% of Lyft drivers work there while having another job or while looking for full time work.

  At $72 per share I'm sure they can afford to invest in the company they made so valuable. :-/

• by aboutruby on 3/28/19, 10:33 PM

  Looks like Uber would be a $90B - $120B valuation, so about ~1/4th of Uber.

  Uber has ~15 millions daily trips, while Lyft has ~2 million daily trips.

• by bfrog on 3/29/19, 4:09 PM

  Intuitively I want to short this, but realistically bandwagon buyers will probably drive the price up.

• by dawhizkid on 3/29/19, 1:47 AM

  I would short out the gate...

• by pl0x on 3/28/19, 11:12 PM

  Congrats to the entire lyft team. Maybe Waymo may acquire them in the future?

• by bitxbit on 3/29/19, 12:25 PM

  I just don’t see how Uber and Lyft survive past autonomous vehicles going mainstream over the next two decades.

• by nodesocket on 3/28/19, 10:04 PM

  I am watching this IPO with keen interest. If it goes well, in terms of market day open to close, perhaps that suggests that the Uber IPO will be a similar success. I also want to participate in the Slack IPO as well.