Word just got out that Uber is trying to go public at a $120B valuation. But it looks like Lyft is trying to beat its arch-rival to the punch!
The Wall Street Journal just reported today that Lyft picked a dream team banking squad led by JPMorgan Chase to lead its IPO, scheduled for early ’19.
Lyft’s banking on a market cap well above $15.1B, the valuation it scored in its latest private funding round in June so investors can hit their ROI targets.
And yes, Uber will be worth around 10x that but it would be a major score for Lyft to beat its ride-hailing foe to the public markets.
Ah, the IPOs!
Just like 1980’s Hulkamania, IPOs have been running wild in 2018.
VCs are getting their 10x, investors get in on the action, and founders get stinky rich. Oh yeah, baby. And even though most of them are unprofitable, they’re still scoring massive market valuations.
So when is this gonna go down?
As of now, Uber’s worth $70B. They’ve said all along they’ve planned to pop the public markets in the second half of 2019.
But according to the WSJ report, they could speed up their schedule and go live on the public markets as early as next year. Apparently Uber received valuation proposals last month from a Wall Street goon squad of their own in Goldman Sachs and Morgan Stanley.
This is often the final stage before a company officially hires a bank to underwrite its offering. As expected, Lyft and Uber both declined to comment.
Why are they fighting to go first again?
Well, there’s no sophisticated reason behind other than the obvious. Even though it’s worth less, Lyft wants to offer ride-sharing stocks first before a competitor gets to satisfy market demand for the hot industry.
Here’s a thing to watch. Lyft is US and almost car-only. Although it’s making its play with its direct-to-user micromobility play with bikes and electric scooters.
Uber, on the other hand, is worldwide, operating in 600 cities in 78 countries. Uber’s even teaming up with taxis around the world and ish.
(Editor’s note: Watch out for tomorrow’s lead story on that!)
UberEats > Lyft
Another factor to consider. Uber’s UberEats—their fast-growing food delivery service—alone (rumored at $20B) could be worth more than Lyft as a whole.
Here’s the kicker: Morgan Stanley and Goldman Sachs’ valuation targets reportedly come from Uber’s non-rides businesses. In other words, Uber’s valuation doesn’t even come from its core business.
Let that sink in for a second.
Should Lyft beat Uber to the punch, that obviously is a huge win. Despite its smaller business, when it comes to hitching a paid ride, US app users look at Uber, then look at Lyft.
On the other hand, should Uber pull off the IPO first—especially in light of this news—going public would mark a huge symbolic victory for CEO Dara Khosrowshahi who took the reigns last summer on the heels of #MeToo scandals and a mass executive exodus.
This Ex-NBA All Star May Just Have The No.1 Wine In The World
Former NBA All Star Yao Ming had his career cut short by injuries. But he’s rebounded, big time, with big scores off the court.
(LOL at these sports cliches…)
Ming founded Yao Family Wines in California’s Napa Valley in 2011. Which is not a major deal; lots of celebrities make mediocre wines that eventually drop off.
Anyway, back in 2015, Ming raised $2M on crowdfunding platform Crowdfunder to scale his own wine. Here’s how it looked back then, according to the Wall Street Journal:
With Beijing’s anti-corruption campaign sapping demand for expensive wines, Yao Family Wines, the biggest seller of high-end Californian wine in China by value, is shifting its focus from Chinese banquet tables to U.S. steak houses. Now 15% of the winery’s revenues come from the US, compared to almost zero at the beginning in late 2011. The company said it has managed to grow its sales in a tough environment, without giving more details.
And now, Ming’s wine—legitimately—is now one of the best in the world, with an approval rating of 95+ from the world’s single most influential wine critic, Robert Parker of The Wine Advocate.
Here’s what he wrote:
“I am aware of all the arguments that major celebrities lending their names to wines is generally a formula for mediocrity, but that is not the case with Yao Ming. These are high-class wines. The two Cabernets are actually brilliant, and the Reserve bottling ranks alongside just about anything made in Napa.”
Yao Ming making legitimate bid to become best athlete winemaker. This wine, which came out last month, got a 95+ from famed wine critic Robert Parker. Bottle costs $250. Sold in US & China. pic.twitter.com/yqDQSO9bxz
— Darren Rovell (@darrenrovell) December 5, 2018
Another influential voice of wine the Wine Enthusiast went even further, awarding his wines 97 and 95 points respectively.
Check out his winery here.
Uber Goes Public And Immediately Loses Over $6B In Value
UBER just went public in the most anticipated IPO since Facebook went to Wall Street.
The ride-sharing company officially hit the New York Stock Exchange Friday, pricing its IPO at $45 a share, which put the ride-hailing company at $81B at 180M shares available—far below their initial $120B projection in their filings.
Uber ended the day at $41.60—down nearly 8% from its listing price, leading to a $6B+ valuation loss.
For perspective: Uber’s last private valuation was about $76B. It’s now worth $75.5B.
Uber’s not the only one crashing out the gate. Even though Lyft beat Uber to the IPO punch, since going public in March, Lyft has lost 29% of its value.
Uber’s been plagued by a number of issues, compounded by the fact that none of the tech unicorns are profitable yet. Uber, for instance, burned through $1B in Q1 alone.
“They waited too long to go public,” Former NYSE President Tom Farley said. “Some of the issues they had — I’ll call it culture — some of the issues they had with their culture would’ve been solved in a public market. You wouldn’t show up on a quarterly conference call every quarter and have three or four new stories like they were having for 18 straight months.”
Did Uber IPO too late?
Although early investors made out like straight BANDITS—just look at Lance Armstrong—investors in the later stage haven’t been as lucky.
“I mean, you look at all the money invested in Uber — 25 billion bucks,” Farley said. “Their pre-money valuation last night was [$]73 [billion]. This is a 2.8x investment.
“That’s great and all, but the initial investors got 10,000 times their money. So the recent people, they haven’t been making money. This is a company that has needed public discipline, this is a company that has needed a public currency, and it’s a company that should have gone public three or four years ago.”
Morgan Stanley Just Released Its List Of Top 10 Companies They’re Investing In
Morgan Stanley just announced the second cohort of its Multicultural Innovation Lab, an accelerator program for technology and technology-enabled start-ups in the post-seed to Series B funding rounds.
The program—now in its second year—targets companies with a multicultural or woman founder, co-founder, or any Chief (insert) Officer in charge of what it calls “innovative solutions across sectors.”
According to various studies, female founders, founders of color—and both—receive as little or less than 1% of venture capital funding—a gap Morgan Stanley says it wants to bridge.
“There is a compelling business case for investing in startups led by women and multicultural founders, yet, as found in our recent report, there is a large market inefficiency to accelerate businesses led by these founders,” Managing Director Alice Vilma says. “We are working to directly address this funding gap, one cohort at a time.”
With less than 3% admitted into the program, each startup will take a seat on its on floor inside Morgan Stanley’s global headquarters in Times Square, New York.
In addition, the companies funded receive pretty precious billboard space all over Times Square. It’s real fancy.
Here are the 10 companies that were selected: