Lyft and Uber: IPO’s Back to Reality

Published on
November 13th, 2019
12 minutes

Lyft and Uber: IPO’s Back to Reality

Trade Ideas ·
Featuring Max Wolff

Published on: November 13th, 2019 • Duration: 12 minutes

Max Wolff, co-founder of Multivariate, discusses the valuation disconnect between public and private companies. He examines the recent push-back against growth-at-all-cost strategies for companies like Lyft and Uber. In this interview with Justine Underhill, Wolff notes why Lyft is a better bet than Uber, presents the macro risks to both stocks, and discusses why he recommends traders sit on the sidelines. Filmed on November 8, 2019.



  • XF
    Xavier F.
    18 November 2019 @ 04:12
    excellent clear and concise
  • AW
    Austin W.
    16 November 2019 @ 04:08
    I love this guy. Seems brilliant, but communicates his points in an easy to understand way.
  • JJ
    Jesse J.
    15 November 2019 @ 01:19
    "Their core business does not make money" & "The user just wants the least expensive ride". Pretty darn accurate. Further, the part on investors putting their money into momentum companies rather than understanding the business itself is spot on. You could easily get more dumb money flowing into these companies for a long while. The last time I tried for an uber/lyft (I didn't care) there were no rides in my city. It was 1 am and there were 0 rides available at any price. It was 2.5 miles home so I just ran. Felt great, haven't used em since.
  • DS
    David S.
    13 November 2019 @ 08:52
    Well done! The venture capital hypermarket is under pressure from simple rational thought. These are real companies at unreal market values. The innovative-disruptor companies like Uber and secondary-disruptor companies like Lift hopefully will continue to provide consumer services. The market price will be brought to a realistic level. Billions of VC capital will be lost. Most of this will not show up in the regular markets but know the losses will be there hidden from clear sight. Any old VC money that can get out will help the Major Market Averages as it is re-invested. DLS
    • DH
      Daniel H.
      13 November 2019 @ 21:16
      There is a reason taxis are more expensive than Uber or Lyft. They drivers are licensed and bonded, pay insurance, etc. You have no idea who you are riding with in Uber and Lyft. And if they get in an accident, who will pay.
    • DS
      David S.
      14 November 2019 @ 17:39
      Daniel H. - I agree. DLS
  • NC
    N C.
    14 November 2019 @ 16:04
    Very good interview. And it got better when you started to lose that upward intonation. Boy that upspeak is hard to listen to. There needs to be consequences to this type of reckless capital and investment by VCs, central banks, and the like. The sooner the better.
  • RL
    Roman L.
    13 November 2019 @ 18:45
    Haven't completed this video but did Max revisit his last trade idea which was a bearish stance on Apple? I mean his thesis is sound but Apple's stock has gone up considerably. Probably going short on a company that relies on buybacks to elevate's stock price was a bad idea. Especially in low interest rate environment where they can issue more cheap debt and buy back more.
    • TS
      Troels S.
      14 November 2019 @ 09:54
      no doubt about that, the huge buyback companies will always beat earnings. with all that cash apple has in it's piggybank, they can just keep purchasing stocks back until their EPS beats the expectation. The stock is up over 60% this year, the ban in huawei has diffently helped them selling more of their expensive iphones in the US + EU. But yeah the gain in the stock, doesn't match sales growth or revenue, so one has to wonder, when the "FOMO" will stop, and the stock will get a more fair valuation.
  • PG
    Philippe G.
    14 November 2019 @ 00:01
    Agree with the overall thesis, but regarding the competitive environment, not sure how easy it'd be for a new entrant...yes, money is cheap these days, but you need scale. Starting up a new service with a dozen drivers, good luck even in the a mid-size US city...incentives for new drivers to sign-up would drown you. Then, I would think, or at least hope, that VCs have learnt their lesson. Good point on the economics of having someone deliver you a sandwich, haha!!
  • CW
    Christopher W.
    13 November 2019 @ 14:44
    "Having an individual adult operator in a motor vehicle drive you a sandwich...I cannot figure out how you make money on that, and neither can they" Savage
  • dd
    david d.
    13 November 2019 @ 10:48