Lyft’s Stock Dropped – Will Uber’s Too?

When we first started driving for Uber and Lyft, they were scrappy startups just hoping to survive. Now they’re becoming massive publicly-traded companies with new shareholder responsibilities and even more media scrutiny than ever.

Mark over at UberHints recorded an interesting video discussing Lyft’s recent stock price, and how it might give us insight into how Uber’s stock might perform once they go public.

Lyft stock prices are dropping. Is the same thing destined to happen to Uber? Let’s talk about it.

Welcome everyone, Mark here from Uber Hints. Before we do anything, please subscribe to the channel, ring the bell icon up above so you know when I post new videos. We’re trying something new here. What we’re doing is making smaller and shorter videos, putting them in a playlist, and seeing if that helps you all. So you can watch them in small pieces rather than be committed to watching an entire 12 or 15 minute video.

Lyft’s stock is way down – What gives?

So this is going to be a video where I’m just going to kind of throw some things out. I’m not an expert at the stock market, but I can see what’s happening. And I just read a story here that said that shares of Lyft are down 31% since their opening trade on March 29. 31%.

Now, we know things like that tend to happen, right? Things go up, things go down, then they level out. 31%, that sounds kind of major league to me. I would feel a little uncomfortable if I invested on that first day, which I didn’t do. And I just kinda wonder, it says that Lyft fell 1.8% on Friday for a new closing low of $59.90. It kinda shows where things are and what’s happening.

Lyft’s stock performance may have affected Uber’s valuation

Do you think that is an indicator of what’s to come for Uber? I just recently read where one analyst said that rather the 100 billion dollars that Uber is trying to raise and valuing themselves at, that they’re more around 50 or 60 billion, which is putting it more in alignment with the numbers we were hearing six months ago of 48 billion dollars. So these are just a lot of numbers. I know they probably don’t mean a lot to you. They certainly don’t mean a lot to me, other than, nobody knows anything, what it boils down to, right? People throw things out there, and what happens, happens.

Amazon lost money, now it doesn’t. Will that hold for Uber too?

And in this particular article, it’s quite interesting, because this comes from VanityFair.com, of all places to talk about investments. And it ends with, so is Uber the next Amazon? Amazon lost money hand over first for a long time before they started becoming profitable and became the behemoth they are right now, or the next Pets.com. I don’t know. I don’t know. But it’s interesting in light of what we’re seeing happening with Lyft.

And this is a big one that some people have been talking about, and I don’t know if this is as big an issue, and it was their acknowledgment that they may never turn a profit. And here is a quote, “We expect our operating expenses to increase significantly in the foreseeable future, and we may not achieve profitability.” And you know right now the way that affects us as drivers, when I say us, I’m not driving any longer, but most of us viewing are, is that, where are they going to get this money from? They’re going to dig their hand deep in our pockets. There’s only two ways to make money, charge more, or raise your prices, or lower your expenses. We’re one of the few expenses they have. So if they wanna be profitable, it’s probably going to come from us.

Profitability vs stock value. Which wins?

Now, the next question I have, do you think they’re really concerned about profitability? Because, again, not being an investment guy, most investors I don’t think at this point care about profitability. They care about value. So if they buy a stock and its value goes up, they’re not really looking to get dividends from that company. They’re looking to see the value of their shares go up. So if they want to sell them, they can make money, right?

So the fact that they may never be profitable is a little disturbing because I don’t see how a company that may never be profitable can stay in business in the longterm. Unless I’m missing something. But I can see how people may want to invest in that company. But they acknowledge they may never turn a profit.

What do you think will happen with Uber’s stock?

So that’s really all I wanted to talk about in this video. What do you think is going to happen with Uber stock? And what about Lyft, have they finally leveled out, or do you think they’re going to continue their steady decline? No one has a crystal ball, but it’d be interesting to hear your opinion.

We are all stakeholders in this, right? Because the money, if they’re going to be profitable, and I’m talking about Uber right now, the money can only come from one place, because right now drivers are their only source of income. Well, I shouldn’t say that because they have investors, but as far as the operation of the business, the only income comes from drivers, whether that be delivery drivers or passenger drives, and each is really big. It comes from us.

What do you think? Do we have something to worry about? I’d like to hear your comments down below. As always, I appreciate it when you like and share the videos, when you subscribe and ring that bell icon. And again, I appreciate what you’ve all been doing for me with the other channel. I’m still trying to reach my 1000 subscribers. So if you could hop over to Average Me and push that subscribe button, I would sincerely appreciate it.

Thanks everyone. I’m Mark from Uber Hints.