Uber and Lyft

(Dan here…Lifted from comments at Spencer’s SP 500 PE)

PGL comments:

1.

It is strike day for Lyft and Uber. Uber’s IPO is estimated to be at $90 billion which strikes me as way overpriced. Why? Net revenue is only $7.9 billion whereas operating costs are $12 billion for the latest reported year. Their net revenue is 7.5 times that of Lyft. Lyft’s operating costs turn out to be 170% of its net revenues.

Interestingly both companies have net revenues that are 23% of gross billing. Let’s put it this way. If your driver charges you $10 for a ride, he keeps only $7.70 even though its is his car, his gasoline, and he is an independent contractor getting no wages or fringe benefits.

If this strike works – the financials for these two companies will go from dreadful to just plain absurd.

2.

Lyft had its IPO on March 1 this year. Suppose you had purchased 100 shares:

https://finance.yahoo.com/quote/LYFT

You’d be out $2300 by now. Keep this up and you can be a great business guru like Donald Trump was!

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