Uber filing for IPO

[Spekulatius]

 

The main risk is that the hot IPO's get oversubscribed, i.e. you subscribe for $100k and only get $10k worth of stock. But the few times that there is a turd you probably get a full allocation. So the risk/reward is a bit skewed. In some European countries there is a preferential treatment for retail investors, i.e. you won't get pro-rated on the first $5k you invest or whatever. That changes the equation substantially and I try to max out the preferential treatment in all of these as a hobby. Pretty sure that is +EV.

 

I think this is a key point. Retail investors are more likely to get the leftovers. Get a small slice of the good over subscripted ones and get a large slice of the bad apples.

 

Overall, I think an IPO is just a special situation, just like a spin-off, mutual thrift conversion or an emerging bankruptcy play. IPO’s can’t be correctly priced or they would not show that large changes when trading begins, so there should be a way to make a buck here. It may not be Graham style investing, but I think it can be value investing in a probabilistic kind of way.

 

 

[Broeb22]

That's an interesting way to think of IPO's as special situations.

[james22]

Overall, I think an IPO is just a special situation, just like a spin-off, mutual thrift conversion or an emerging bankruptcy play. IPO’s can’t be correctly priced or they would not show that large changes when trading begins, so there should be a way to make a buck here. It may not be Graham style investing, but I think it can be value investing in a probabilistic kind of way.

 

Yep.

[SharperDingaan]

Hey all:

 

I've said it before, and I'll say it again.  I think there is more likely than not, NO VIABLE business model for Uber.  They aren't currently making money, they aren't going to make money in the foreseeable future...meanwhile they've got BIGLY problems with their drivers.

 

Here in Detroit, there was a strike or work slow down the day before the IPO.  Local news casters were interviewing the agitated drivers, and they were universally complaining about the low pay.  They were also upset with the way that Uber treats them.  Lower wages over time, Uber keeping more of the revenue, not being responsive to operational problems, drivers perceiving their status as being mere cogs in the machine....and so on.

 

I think it is HIGHLY LIKELY that those people who want to drive for Uber are already doing so.  With all this negative publicity, what NEW people are going to consider being drivers for it?

 

Then add on a DOWN DAY on the IPO, and voila, you've got a dumpster fire all the way around!

 

Perhaps if Uber scaled back 90%, then maybe it would profitable and have viable business model?  For example, back when I had a job, I would drive from one side of Detroit to the other.  If I could find somebody who wanted to hitch a ride, that would have been great, even if I only got paid $5...$5 is better than nothing on a trip that is already being taken.  Perhaps that is the best path for Uber, sell unused capacity in existing vehicles taking trips?  People driving for Uber simply to make $$$, and as a job ain't going to cut it.

 

I don't understand these drivers complaining about money. I mean, I have never seen Uber advertised as a full-time job. Commercials always show it as additional income when you have a few hours to spare. I drove for them while in college and some nights when my wife worked 3rd shift as a nurse. I was quite happy to have some "beer" money in college. If anything these people should be thankful Uber exists. It facilitates everything for them and gives them a platform to make some extra income. Nobody is forcing them to drive for Uber and they could go out and start their own private taxi service if they really wanted (my neighbor used to do with for a local Judge...made out pretty good). Society needs to stop trying to push these supplemental income jobs as careers. Bagging groceries, flipping burgers and driving for Uber isn't a career. We need to hold firm to this conviction, because out of necessity comes change. People will learn this and adapt if needed.

 

Fun fact: also paid for the entirety of my honeymoon by donating plasma in college. But that's a story for another time.

 

I agree, it makes no sense to take an on demand job with a contractor and then demand benefits. It’s also off base, because Uber right now loses money, so one could make the argument they it subsidizes the riders , but also the drivers.  If some has a reason to complain, it would be taxi drivers since they get more unregulated competition.

 

Uber is just a tech solution looking for a sustainable market, and is discovering that it isn't as big as thought.

The protests evidence that labour wants benefits as part of the gigs pay; yet Uber apparently cannot accommodate what is a simple change (lower future pay + benefits = existing higher pay)? 'Cause MAYBE Uber is actually a very brittle business?, and this effectively destroys the business model?

 

Labour laws typically require a minimum pay rate for a minimum shift length (ie: $10/hr for a minimum 3 hour shift), and exist to prevent abuse. Those labour laws also specify tests to determine if you're an employee, under the labour law, or not. Uber's model ASSUMES the driver is contracted PER RIDE, for which Uber will pay a variable rate based on various factors. If you did 5 rides for Uber over a continuous 3 hour period, were you ACTUALLY a contractor or an employee?, and did you receive AT LEAST the minimum pay as required by law? The protests imply that in many cases, Uber is actually underpaying, and it is widespread.

 

So what?

 

We have a tech solution that ONLY works in either a 'right to work' state, or for 'illegal' employment.

And how many of the states where the bulk of Uber business is done, are 'right to work' states?

 

Maybe folks overpaid for this IPO?

 

SD

 

 

 

 

 

[Spekulatius]

Interesting background on Uber IPO:

https://finance.yahoo.com/news/uber-blame-game-focuses-morgan-014218851.html

 

I also thought UBER might be a decent flip. However, I think there is a warning here they with these mega IPO where  they wait such a long time until they IPO that most semi professional investor have gotten in it already or IPO and there isn’t much demand left. I find it ironic that even so I subscribed for a few shares with Gidelity, I did get zero allocation, yet when the stock was started to trade, it dropped like a stone because nobody wanted to own it.

 

I guess most of these semi professional pre IPO investors simply bought this for flipping. Thanks for playing!

[rukawa]

Anybody try to get some shares? It’s priced at the low end at $45 to make sure, the shares fly of the shelves. Should be good for an IPO pop, imo.

 

Is this Value Investing?

 

Who cares if it is "Value Investing". Value investing is just a means to an end. I'd draw nice colored graphs and candlesticks all day long if that would make more money. The correct question is: is it profitable? And I wouldn't be surprised if subscribing to the Uber IPO and selling at the open is +EV.

 

Nonamestocks does pretty well with a mix of technical analysis and "value investing" in very low liquidity stocks. I sometimes wonder about what he is doing.