As the government shutdown is taken off the table, at least temporarily, blockbuster IPO filings for 2019 are back under the microscope.
Duncan Davidson, General Partner at Bullpen Capital, told TheStreet he is looking forward to numerous IPOs, specifically Airbnb, Slack, Lyft, and Uber.
On the two ride-sharing companies, Davidson noted that he much prefers Lyft to Uber.
“I am afraid that Uber goes out and it’s not a high value and won’t do that well in the IPO in terms of popping. Lyft on the other hand has got a much cleaner cap table and I think it’s undervalued,” he explained. “I’m long Lyft and short Uber to use market parlance. Lyft to me is the more important offering.”
Still, Davidson was wary of the temporary nature of the government shutdown, as it adds uncertainty to the IPO timeline and could significantly delay the expected offerings.
“The shutdown did not really affect the schedule too much,” Davidson said. “What I’m worried about now is that if we do a second shutdown, that would really screw up the IPOs.”
Exactly.
The companies who are giving valuations to the rideshare companies are just learning about everything, industry related, and finding problems they did not know existed primarily related to Uber. The valuation we heard, from Uber, in December was $120 Billion. Now, in late January, the highest valuation out there is $100 Billion and the lowest is $43 Billion. Most companies who do these valuations are saying in the $50-$60 Billion range. Uber is a complete mess, and the SEC doesn’t overlook anything. In the end I think Uber is in for some extremely serious problems in the coming months.
The rides are changing. I am a trader and have no intent of investing in Uber, long or short! This company has not been truthful or trustworthy, the treat their customers and contract drivers horrible, they waste waste waste money on tech sectors they are not familiar enough with, and the biggest problem they face is they have never had a profitable quarter since their beginning almost 10 years ago.
Lyft, on the other hand. Lyft is correctly valuaed to hit the market, and potentially see a correction in value quickly. I believe there is money to be made in Lyft, both long and short, but I’m going ‘LYFT LONG’!