Say hello to one of the highest privately valued American companies to go public in the last ten years. Lyft (LYFT) went public last week and its shares rose 8.7 percent in its first day of trading after opening at $87.24, above the public offering price of $72. By the end of the day, the ride-hailing firm’s market value stood at $26.4 billion.
How about that long run, though?
When it comes to IPOs, gains on an initial price doesn’t necessarily mean it’s a long-term winner. Many hedge funds aren’t thrilled about Lyft's long-term prospects. So why buy? Hedge fund investors purchase stock in bulk and are able to buy it at the offer price, which is usually about 10 - 15 percent lower than what it will trade at on the share market. Profit early on and sell before interest from regular investors (that’s us) subsides. We see what you are doing here.
Read the fine print
Lyft’s IPO filing came with a not-so-subtle warning: “We have a history of net losses, and we may not be able to achieve or maintain profitability in the future.” *Cough* Investors must feel that growth trumps profit. Meanwhile, Lyft’s owners and investors are suddenly wealthy – the company’s five biggest investors finished the first day of trading with stock holdings valued at more than $1 billion. Thanks to the competition between Lyft and Uber, users of their services are also winners as each company is trying to undercut the other’s prices to gain market share.
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Netflix, chill? Apple TV’s comin’ for you
Apple (AAPL) just announced Apple TV Plus, their new streaming service that will offer exclusive shows, movies and documentaries from filmmakers like JJ Abrams, Steven Spielberg and M. Night Shyamalan. They had Oprah at the event so you know they mean business.
But it wasn’t just about the TV. They also announced The Apple Card, Apple News Plus, and a gaming streaming platform – Apple Arcade. Apple, slow down! We can barely keep up. Apple TV Plus will be ad-free from the start and will be available in 100-plus countries through the Apple TV app. Available in autumn 2019, we have no idea how much it’s going to cost. On top of Apple TV Plus, they also introduced Apple TV Channels, which will combine cable subscription services and streaming services like Amazon Prime Video into the Apple TV app. But not Netflix (NFLX). Well played, Apple.
Better than Netflix?
Well, it’s like Netflix but also not. At the launch, Tim Cook, Apple CEO, made it clear that Apple TV Plus isn't Netflix. The service will offer original content, but it won't provide licensed content – so no syndicated shows (think Seinfeld). Will it work? Apple has a base of 1.4 billion users, and a lot of money, so that’s a pretty good sign of things to come. We’re not in the prediction game, so it’s best to – get ready for the pun – watch this space. Nailed it.
Facebook is listening, in a good way
Some say the app is always watching and listening, but right now Facebook (FB) is listening in a good way: Sheryl Sandberg and Mark Zuckerberg have just set out how they believe the social network and the internet should be regulated after the Christchurch shooting. Well done to all the Kiwi businesses calling for change.
Interpret this: a more active role
Zuckerberg says there’s a need for governments and regulators to have “a more active role” and he believes new regulation is needed in 4 areas: harmful content, election integrity, privacy, and data portability. Published both in the Washington Post and on his own Facebook page, Zuckerberg’s editorial talks about updating the rules for the internet, to keep it as a place where people have the freedom to express themselves while also protecting society from broader harms. But on the subject of harmful content, he took a defensive stance saying that they’ll always make mistakes and decisions that people disagree with. He did, however, add that Facebook is creating an independent body to challenge its decisions.
Take your white nationalism elsewhere, jerks
Facebook also said it would no longer allow content supporting white nationalism. But let’s not get Mark a bouquet of flowers just yet – it took Facebook years to concede that white nationalism is the same thing as white supremacy, which could be seen as a case of too little, too late. That said, people grow, even powerful tech CEOs. A year ago, Zuckerberg was on the fence about regulation, so this switcharoo looks promising.