{"id":146288,"date":"2020-02-11T18:52:31","date_gmt":"2020-02-11T18:52:31","guid":{"rendered":"https:\/\/stockchase.com\/discover\/?p=146288"},"modified":"2020-02-11T18:52:31","modified_gmt":"2020-02-11T18:52:31","slug":"beyond-meat-lyft-uber","status":"publish","type":"post","link":"https:\/\/stockchase.com\/discover\/beyond-meat-lyft-uber\/","title":{"rendered":"Beyond Meat, Lyft & Uber (Stock Market Newcomers): Is the hype worth it?"},"content":{"rendered":"

This week and next we examine recent splashy IPOs and assess their future prospects. Is the hype worth it?<\/p>\n

Canada has actually seen a decline in initial public offerings. Since 2000, there have been 15 IPOs<\/a> on the TSX each year, but there were 43 annually between 1993 and 2000.<\/p>\n

Canadian companies seem to find friendlier money in private markets. Even south, there’s been an 87% drop in tech IPOs since 200. However, a handful of tech companies have generated publicity, created pent-up demand and gathered Wall Street muscle to go public. After all, tech stocks have been leading the recently rally.<\/p>\n

So, are these unicorns slam dunks? Like anything in investing, initial public offerings could make investors money\u2014or lose.<\/p>\n

If you bought Facebook<\/a> at $38 a share when it debuted on May 18, 2012, you’d be up 455% to today’s $212. (By the way, FB<\/a> is typical of IPOs; they don’t pay a dividend. So, steer clear if you’re seeking income.)<\/p>\n

Of course, the biggest risk is that an IPO can fall after its debut. Fitness company, Peloton<\/strong> (PTON-Q), continues to struggle to trade above its IPO price of $29. The stock has been bobbing above and below that mark since Sept. 26, 2019. To be fair, it takes time for an IPO to deliver a few promising quarters and build investor confidence, so we’ll look at some high-profile IPOs that have been around a little longer.<\/p>\n

\"beyond<\/p>\n

Beyond Meat<\/a><\/p>\n

IPO date & price: May 2, 2019 \/ $25<\/i><\/p>\n

Their meatless protein burgers sparked a sensation last spring, and this stock sizzled all the way to $239 by the end of July 2019. Everyone you knew either tasted a Beyond Meat<\/a> burger or was planning to. But all fads die. Beyond Meat<\/a> fell to $75 and surged to past $100 to begin this year.<\/p>\n

It now trades around $120 with a profit margin of -34%. Last October, the company announced a Q3 earnings<\/a> beat which didn’t prevent it from selling off. A key reason was that by late October, almost 80% of BYND<\/a>‘s original shareholders were now able to sell their stock<\/a>.<\/p>\n

That said, public demand proves that meatless protein sector is here to stay, which is why Beyond Meat<\/a> now faces a stampede of competitors and why analysts are skeptical about its future. BYND<\/a> still has to prove it can make money, Ross Healy<\/a> said last week. Too risky, adds Colin Stewart<\/a>, and he prefers the established MLF-T whose traditional meat protein line can offset their plant-based protein products.<\/p>\n

However, technical analyst Elliott Fishman<\/a> last month noted that momentum is on BYND<\/a>‘s side and despite competition it could return to $160. IN fact, since the start of the year, Beyond Meat<\/a> has risen 61%, though it’s meeting resistance around the current level of $120. My take: very risky.<\/p>\n

\"uber<\/p>\n

Uber<\/a> and Lyft<\/a><\/p>\n

Lyft<\/a> IPO date & price: March 29, 2019 \/ $72<\/i><\/p>\n

Uber<\/a> IPO date & price: May 19, 2019 \/ $45<\/i><\/p>\n

The battle of the ride-sharers launched amid much hype. By then, \u201cuber<\/a>\u201d had become a verb and synonymous with battles against cab drivers and city governments. Lyft<\/a> was the upstart, threatening to take on the established giant in a disruptive service that public demand resoundingly proved was here to stay. So, both stocks were a slam-dunk, right? Barely three months after its debut, Uber<\/a> issued a brutal Q2 earnings loss<\/a>, posting a loss of $4.72\/share vs. the street’s expected $3.12. The street was already nicknaming Uber<\/a>‘s IPO a \u201ctrain wreck.\u201d<\/p>\n

Uber<\/a>‘s CEO explained that its Uber<\/a> Eats food delivery division needed time to pay off. However, the day before, Lyft<\/a> reported revenues of $867 million, beating the street’s $809 million. However, both companies face the same hurdles. Sexual assualt charges and lawsuits have plagued both Uber<\/a> and Lyft<\/a>. Kim Bolton<\/a>, who specializes in tech stocks, and Greg Newman<\/a> counsel patience, saying Uber<\/a> won’t take off for a while, so hang on if ya got ’em.<\/p>\n

As for Uber<\/a> Eats, the street is split. Analysts such as John O’Connell<\/a> sees potential in this service, but Ross Healy<\/a> is downright pessimistic it’ll make money. David Baskin<\/a> sums up market sentiment about Uber<\/a> (but could also apply to Lyft<\/a>)\u2014the fundamentals aren’t there yet, it hasn’t turned a profit and it faces competition. Also, both companies are battling California legislation<\/a> that requires them to treat their drivers as employees and pay them health coverage and workers’ compensation, not as contractors as they are currently are.<\/p>\n

Compared head-to-head, Lyft<\/a> has been outperforming Uber<\/a> since the latter’s IPO, but only modestly. A divergence would indicate which stock to buy, but it hasn’t happened yet. Also consider that in this time period, the Nasdaq has soared 21%, but Lyft<\/a> has climbed only 4%. My take: Too many legal problems cloud their horizons and they still need to turn a profit. But ride-sharing is here to stay, so there’s potential. Keep an eye on them.
\n<\/span><\/span><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

This week and next we examine recent splashy IPOs and assess their future prospects. Is the hype worth it? Canada has actually seen a decline in initial public offerings. Since 2000, there have been 15 IPOs on the TSX each […]<\/p>\n","protected":false},"author":12,"featured_media":146548,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"cwp_meta_box_check":"No","cwp_rev_product_name":"","cwp_rev_product_image":"","wppr_links":[],"cwp_rev_price":"","wppr_options":[],"wppr_pros":[],"wppr_cons":[],"footnotes":""},"categories":[17],"tags":[],"class_list":["post-146288","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lists"],"wppr_data":{"cwp_meta_box_check":"No"},"_links":{"self":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts\/146288","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/comments?post=146288"}],"version-history":[{"count":0,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts\/146288\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/media\/146548"}],"wp:attachment":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/media?parent=146288"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/categories?post=146288"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/tags?post=146288"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}