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Uber Goes Public And Immediately Loses Over $6B In Value

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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.

What’s happening?

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.”

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VIDEO: Here’s How You Know A Company Is F*****

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Well…not much to say here. The header sort of speaks for itself. As told by Investopedia‘s Microsoft Sam-sounding narrator. Check it out.

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Chart: All The AI Startup Exits That Made Over A Billion Dollars

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Artificial intelligence—AI—is getting those investor checks. In Q2 alone, AI startups raked in $7.4B in funding. And if you look at the exits, you can see why VCs are bullish. It’s a sector that’s delivering some very valuable exits.

Since 2013, seven AI companies have had billion-dollar exists—either through IPO or M&A—four of which have taken place in the last two years. Here’s a chart from CB Insights with all seven.

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10 Bizarre Things About The WeWork IPO Filing

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wework

As WeWork goes public in its recently announced IPO, professionals and entrepreneurs better take note. The sharing economy is spreading its wings beyond Uber and AirBnB.

Although less well known than those icons of the sharing economy, WeWork could change how we work in the years ahead.

That said, its IPO is a bit bizarre, as the media has been quick to point out. Here’s why.

1. We Work Is Running Spectacular Losses

In 2018, the company had a net loss of $1.9 billion. In the first 6 months of 2019 alone, it lost another $900 million.

2. Investors Worry The Company Will Run Out Of Cash

MKM Partners’ Rohit Kulkarni said the company faces a real prospect of running out of cash in a few months’ time.

3. WeWork Is Spending Money Like It’s 1999

via GIPHY

The startup has a burn rate of $150m-$200m a month.

4. Over $47 billion In Future Lease Obligations

WeWork will need to make a ton of money in the future to make it all work.

5. Its Contracts With Users Are Short Term

The startup keeps things flexible for users but is taking on more of the risk itself.

6. The Company Could Be On The Hook If Users Leave

If users defect, WeWork’s rent obligations remain. This should worry any investor.

7. WeWork’s Business Model Is Iffy At Best

The company has declining revenue per user, on top of its failure to be profitable. In other words, things could get worse for investors.

8. Conflicts Of Interest With The CEO  

WeWork leases some buildings owned in part by CEO Adam Neumann, paying millions in rents for it.

9. WeWork’s China Assets A Puzzle For Investors

The company’s assets in China are puzzling for investors, and they carry unique risks yet to be fully understood.

10. Despite All Its Troubles, WeWork Has A Staggering Valuation

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This unicorn has a valuation of $47 billion. Some in the business media say it’s based on smoke and mirrors. The IPO could be a good test of whether the valuation will hold.

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