Tuesday, April 2, 2019

A Bad Marriage? Lyft's New IPO And The Investor Community & A Pink Bunny

The Lyft IPO Bad Marriage

Much has happened since Lyft's initial IPO Friday, with a first day valuation of $26.4 billion dollars.  It has not been pretty since, the honeymoon breaking into marketplace argument.  I use the analogy of bad marriages because I know all about it, not heeding an inappropriate laugh from my future wife during our first month together way back in 1976,  twelve years later a divorce telling me what I had already known years prior.  My only excuse then was youth, only 21 and unwise in love and passion.  Yes, there were good moments, real positives encouraging my emotional investment but the signs were there that Love's equity would plummet to nothing, our romantic stock worthless paper.

Too, then, has been the optimism associated with Lyft, a company bright and shiny but a real money loser, tossing over 1 billion away into the financial garbage can.   Still, last Friday, Lyft's initial stocking offering jumped from $72.00 a share to $78.29, a 8.7 % gain.  At one point shares listed at $88.68 each, I'm sure making everyone happy.

Monday, with the relationship souring, shares dropped 12 % to close at $69.01, not good for kissing and hugs and eternal sweet nights.

Tuesday, today, April 2nd, 2019, the lovers were no longer happy, having moved to separate bedrooms, shares down another 4.2 %  $66.10 but rising mid-afternoon $67.41, everyone deciding to have coffee and talk about their future.

As Kathleen Smith, financial analyst at Renaissance Capital, put it,

"Its a good example of why people should approach IPO investing cautiously.  This company has large losses and will not be profitable in the near future."

Ah yes, a poor foundation for a stable marriage.  But as I keep saying, Lyft (and Uber) are more Ponzi-scheme than serious, ongoing companies  Why the IPO anyway, why not keep operating until gaining real profit?  The answer is in this investor list.  They want their money back and want it now, all future investors be damned, their concern their own wallet.  Some of these investors might surprise you but don't be because it's all about "money honey!" and little else, money making or breaking most marriages.

Raken, a Japanese e-commerce firm---$2.26 billion

General Motors---$1.34 billion

Fidelity, a financial firm---$1.34 billion

Andreessen Horowitz, a venture capital firm---$1.1 billion

CAPITALG (Google)---$924 million

Logan Green, co-founder and Lyft CEO---$603 million

John Zimmer, co-founder and Lyft President---$416 million

Floodgate, a venture capital firm---$111 million

Valerie Jarrett, former Obama advisor---$478 million

If this keeps going, this financial marriage will last as long as the Cher Bono & Greg Allman nuptials, just a few un-blissful months.  Oh such beautiful music, "Gypsies, tramps and thieves......"

Homelessness: A Pink Bunny

The crisis team put the mother and her 7 year-old daughter in my cab bound in the late night for a "Little House" homeless camp.  Upon arrival, they were refused entry, the little girl clutching her stuffed pink bunny rabbit.  Waiting for further instruction, the mother told her daughter that"she didn't deserve being put through this."  Hard to disagree as we drove south toward Burien, the mother disheveled and paranoid, many attempting to help what might be intractable, beyond quick resolution.

A little girl.  A rumbled pink bunny.  Sadness in the night.

Editoral Note:

Lyft IPO info originating, gathered from Washington Post & NY Times news sources.

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