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09.05.19 15 IPOs Uber may stumble like Lyft even as other recent IPOs soar Uber will be looked at through the lens of Lyft — the Pepsi to Uber's Coke in the ridesharing business. And that may not be good news for Uber BASED on how two high-pro- file initial public offerings have done lately, Uber might be bet- ter off pitching itself as a delivery service for plant-based food via Uber Eats instead of a company that takes passengers from point A to point B. Uber rival Lyft (LYFT), report- ed its first results as a public company after the closing bell Tuesday, has been an unmiti- gated flop on Wall Street so far. e stock is currently trading at about $61 — more than 15% be- low its IPO price. Contrast that to Beyond Meat (BYND), the buzzy maker of ve- gan burgers that went public last week and has more than tripled from its IPO price. Beyond Meat isn't the only uni- corn that's had a successful offer- ing. Photo sharing site Pinterest (PINS) has gained more than 50% from its IPO price while vid- eo conferencing company Zoom (ZM) and cloud computing firm PagerDuty (PD) have more than doubled. But Uber (UBER), which is set to debut on the NYSE tomor- row, isn't likely to be compared to any of these companies. It will be looked at through the lens of Lyft — the Pepsi to Uber's Coke in the ridesharing business. And that may not be good news for Uber. "Let's not sugarcoat it, Lyft's stock has been a head-scratch- ing train wreck since the IPO," wrote Wedbush analysts Daniel Ives and Ygal Arounian in a re- port last week. Don't judge an IPO by how it does in its first few months Still, no matter what Uber's stock does tomorrow, it might be a mistake to write it (or Lyft or that matter) off for the long haul. Just look at Facebook, for ex- ample. e company's shares famous- ly plunged more than 50% from their IPO price in the first four months after their May 2012 IPO. But Facebook (FB), despite its numerous privacy problems and other gaffes, has more than recovered from its early days growing pains and is now one of the most valuable companies on the planet with a market cap of nearly $550 billion. With that in mind, Wedbush's Ives and Arounian wrote in an- other recent report that they think Uber will wind up being the "Amazon of Transportation" and that the company could wind up one day being considered a tech stalwart mentioned in the same breath as the so-called FAANG stocks of Facebook, Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Google (GOOGL) owner Alphabet. Others are more concerned that the current crop of unicorn IPOs is reminiscent of the rush of dot-coms that went public in 1999 and 2000 just before the tech bubble burst, especially since many of them are losing gobs of money. Profits matter - even for unicorns Lyft reported a bigger than ex- pected loss of $1.1 billion for the first quarter. at's on top of a $910 million loss for all of 2018. Uber is losing even more mon- ey, and several other unicorns set to make their debut later this year, such as WeWork and Slack, are bleeding red ink too. Many of these tech companies may be rushing to go public now before a possible economic slowdown in 2020, noted Daniel Morgan, senior portfolio man- ager with Synovus Trust Com- pany, in a recent report. "Clearly their bankers have whispered in their ears, alerting them that the grass is high in public markets and now is the time to graze because a drought is coming," Morgan said. Google and Facebook were both profitable when they went public and that's one of the rea- sons why they have been suc- cessful. Uber and Lyft look a lot more like Snapchat parent Snap (SNAP), which has struggled since its IPO two years ago, than they do Google and Facebook. Uber and Lyft drivers plan to strike and rally ahead of Uber's IPO Rideshare drivers are planning to strike and rally again — this time, ahead of Uber's impending IPO. Drivers in New York City are expected to protest by logging off ridehail apps for two hours on Wednesday morning, according to the New York Taxi Workers Alliance. Drivers in other cities, including Los Angeles and San Francisco, are also expected to strike. e drivers intend to send a message to Uber, which is re- portedly slated to begin trad- ing as a public company next Friday: ey want livable in- comes, job security, and regu- lated fares. at's according to the NYTWA, which represents 21,000 professional drivers — including drivers for Uber and Lyft — in New York City, Uber's largest market. e drivers also plan to ral- ly outside the Long Island City offices for both companies Wednesday afternoon. Uber and Lyft have built their businesses on the backs of driv- ers. But the competition means engaging in pricing wars, using discounted prices to attract rid- ers. Both companies are bleed- ing money and what drivers make is the biggest cost they can control. As tokens of good- will, the companies have of- fered drivers who meet certain thresholds cash bonuses ahead of going public. But it hasn't been enough to appease the broader pool of workers. Drivers similarly went on strike ahead of Lyft's IPO to voice concerns over recent pay cuts. Notably, New York City is the first and only market to have implemented a minimum wage law for ridehail drivers. Under the new policy, which went into effect on February 1, drivers are supposed to earn a mini- mum take-home wage of $17.22 per hour. at's the ridehailing equivalent of a $15 minimum wage, accounting for the fact that drivers have to cover pay- roll taxes and don't get paid time off.

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