• Trading Software
    • TradingView
    • NinjaTrader
    • MT4
    • Thinkorswim
    • TradeStation
    • MultiCharts
  • Online Classes
  • Trading Courses
  • Free Resources
    • Economic Calendar
    • Blog
    • Webinars
    • Newsletter
  • Sign Up
  • Sign In
Trade The FifthTrade The Fifth
  • Trading Software
    • TradingView
    • NinjaTrader
    • MT4
    • Thinkorswim
    • TradeStation
    • MultiCharts
  • Online Classes
  • Trading Courses
  • Free Resources
    • Economic Calendar
    • Blog
    • Webinars
    • Newsletter
  • Sign Up
  • Sign In

Education

Home » LYFT IPO – Gamble or Sound Long-Term Investment
image of LYFT IPO gamble header

LYFT IPO – Gamble or Sound Long-Term Investment

  • Posted by Paul
  • Categories Education
  • Date March 30, 2019
  • Comments 0 comment
24shares
  • Share
  • Tweet
  • LinkedIn
  • Reddit
  • WhatsApp

LYFT IPO – Gamble or Sound Long-Term Investment

The LYFT IPO finally released on Friday 29th March amongst lots of hype from avid tech investors.  But are they turning Tech IPO’s into a Gamble by taking profits quickly, or is there a long-term investment opportunity here?

First some facts about LYFT and their IPO.

  • LYFT made a loss of just under $911 million last Year!
  • In 2018 LYFT Revenues were nearly $2.2bn from 30.7 million riders and 1.9 million drivers.
  • 60% of the company is still owned by the founders Logan Green, John Zimmer and 12 other top LYFT directors and executives. So, in effect regardless of any future disquiet by public shareholders on how the company is run, they won’t be able to affect change! Believe it or not, this model has become the norm in Silicon Valley with $FB, $SNAP and others with similar majority voting rights with founders and executives.
  • LYFT issued 32.5 million shares at $72 per share.
  • The company’s share price opened around $87 per share, a whopping 21% above the $72 set by the Company on Thursday night before the IPO when it raised $2.34bn from investors.
  • During $LYFT’s first day of trading the market witnessed a high of $96.84, a low of $75.49 and finally closed at $87.49.
  • More than 70 million shares exchanged hands by the close of the Markets in its first day!

One small takeaway from the last fact, in my opinion, is that traders aren’t really serious about long term investing as, in theory, each share changed hands at least twice in the first day of trading!

These are just some of the facts surrounding $LYFT and let me pose a simple question. Please forget the sector this company is in and put your sensible, mature investing head on for this next question.

image of LYFT IPO questions emojiIf you had company “A” that made such a LARGE loss after record revenues in any company going public, would you say to your friends and family. This looks like a great Investment?

Just think about that a minute.  Your telling your friends and family to put some of their hard-earned cash into a company that loses money, money they can’t afford to lose!

Take the SNAP example – Lots of hype leading up to IPO, lots of initial activity and all these months since IPO, still 8% below its original $17 offering price! AND Morgan Stanley cutting its price target for $SNAP to $16 from previous $28!

Investors learn from previous market reactions, earnings and news cycles.  So as a long-term investor I will look at some key points:

  • Recent SNAP IPO experience in the markets!
  • BIG loses in 2018 for LYFT, despite record revenue! Smells like business model isn’t working!
  • Even if the public shareholders recognise the business model isn’t working, they can’t do anything about it! Because the Company founders, executives and Directors, that potentially are running a poor business model has the majority of voting shares!

So as a normal human being that has maturity, patience and common sense, who’s Blend portfolio has grown 16% in the first quarter this year (slightly outperforming the S&P500). I have to fall back to my base saying about IPO’s

“If in Doubt, Stay Out!”

So, for now, I will let the Tech Gamblers play with this stock see where the true value is over time and look for genuine profit taking pullbacks to trade. It may appear in our Swing Trading membership in the next year, if it performs!

I don’t want to be LEFT out in the rain by a Poor LYFT ride!

Tag:investing, longer term investing, LYFT, LYFT IPO

  • Share:
Admin bar avatar
Paul
Paul Bratby is the CEO and founder of Trade The Fifth, an Elliott Wave program designed to educate traders and investors on the financial markets so they can take responsibility for their own portfolios and trading accounts by learning how to ride the profitable Fifth Wave setup. Paul started in the business over 14 years ago, and combined his career as an Engineer along with his Military Mindset to develop a repeatable trading and investing strategy that he has used to manage 8-figure accounts.

Previous post

EQC Stock Signals Video for Potential Long Swing Trade
March 30, 2019

Next post

Stocks Signals Video Short ITUB Vs RSG Long - Playing Both Sides
March 31, 2019

You may also like

🆕Potential Long SwingTrading Opportunity on $W Wafair Inc
19 January, 2021

Brief video setting up a potential Long Swingtrading opportunity on the Wayfair Inc Stock using our Elliottwave Indicator suite

🆕Elliottwave indicator suite calculates and prints the elliottwave count
16 December, 2020

Quick video to show how our Elliottwave indicator suite calculates and prints the elliottwave count, the probability pullback zones and the automated 5th wave target zone..

image of tradingview stocks swing trading chart trade management
Trade Management for Stocks Swing Trading
9 July, 2020

Leave A Reply Cancel reply

Your email address will not be published. Required fields are marked *

Categories

  • Blog
  • Daily Videos
  • Education
  • Trading Journals
  • TradingView
  • Uncategorized
  • Videos
  • Webinars

Archives

USA Office: 19 W 34th Street, Suite 1018,
New York, NY 10001
US Phone: +1 (415) 992-7787

Ireland Office: Unit 3D, North Point House,
North Point Business Park, New Mallow Road,
Cork, T23AT2P, Ireland

Copyright © 2020

Learn More

  • Trade Ideas
  • Contact Us
  • About Us

Legal

  • Privacy Policy
  • Terms of Service

Latest Tweets

Tweets by tradethefifth

Swing trading, Day trading, short-term trading, options trading, and futures trading are extremely risky undertakings. They generally are not appropriate for someone with limited capital, little or no trading experience, and/or a low tolerance for risk. Never execute a trade unless you can afford to and are prepared to lose your entire investment. All trading operations involve serious risks, and you can lose your entire investment. No trades are recommendations or advice and we cannot be sued for losses of capital. All trades are for educational purposes only. Contact your broker or RIA for execution, margin, and other capital requirements. All users and viewers of wave5trade.com adhere to ALL terms of service on www.tradethefifth.com

Hypothetical Performance Disclosure: Hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results. Past performance is not necessarily indicative of future results.

Testimonial Disclosure:  Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.

Trade The Fifth