Over the course of the last few years, Uber Technologies Inc., the ride-hailing application used by drunk girls and business folk alike, has maneuvered itself around many road obstructions in the form of a series of scandals, sexual harassment claims, and of course, the alleged theft of industry secrets from rival Alphabet Inc. Earlier this year, Uber’s co-founder and CEO, Travis Kalanick, resigned after investors insisted that he step down following countless charges and scandals.
The company’s new chief executive, Dara Khosrowshahi, has done everything in his power to bring estranged investors back into the fold, as well as create new initiatives to attract drivers and riders who might otherwise use any one of the growing ride-hailing applications.
Uber has received numerous proposals from Wall Street banks valuing the company at nearly $120 billion in an initial public offering (IPO) that is likely to occur early 2019. The colossal evaluation is double Uber’s valuation in a fundraising round several months ago, and “more than General Motors., Ford Motor Co. and Fiat Chrysler Automobiles are worth combined.
The two banks responsible for these valuation proposals, Goldman Sachs Group Inc. and Morgan Stanley, have offered their insight as to how to best position Uber’s shares to potential investors, in the event that the company chooses to go public. The Company, founded in 2009, is part of a unique group of highly valued startups who’ve staved off entering the public markets. Reports are indicating that Uber’s rival, Lyft, has an IPO in the woodwork.
Early on Tuesday, Lyft announced their selection of JPMorgan Chase & Co. as the “lead underwriter of its initial public offering along with Credit Suisse Group and Jefferies Group, the WSJ reported. The first step in the process of filing an IPO typically involves choosing an underwriter, and Lyft hopes to beat Uber to market. Though Lyft’s valuation will exceed its initial $15.1 billion valuations raised in private funding from earlier this year, the company’s value is considerably lower than Uber.
Unless Lyft can beat Uber to a public offering, the company runs the risk of losing market interest, given the massive valuation of its largest competitor. Lyft’s saving grace, if anything, will be its recent foray into the “micro-mobility” space. The company recently released bikes and scooters for rental all around the United States, competing with scooter-sharing companies like Bird and Lime.
The ride-hail company is, unfortunately, playing a massive game of catch-up in a market that’s bursting at the seams with billion0dollar startups, but while other companies have faced scrutiny for placing their scooters without proper permitting, Lyft believes they can play nice with city officials.
Uber acquired bike-sharing startup, Jump, in April, in a deal reportedly worth over $100 million, and has seen riders try to be more environmentally conscious and enjoy the outdoors. Now, to assure Lyft’s position in the slow-lane, Uber is pushing Jump to add electric scooter sharing to their platform.
“We want to be the Amazon of transportation. And hopefully, 10 years from now, no one in the audience is going to own a car.”
- Dara Khosrowshahi CEO Uber Technologies Inc.
Uber released their first Jump scooters in Santa Monica, no doubt to signal to Bird, whose headquarters is based in the beachside city, that a storm is coming and they should wise up, lest they get their wings wet.
Uber riders will be able to locate and claim a Jump electric scooter from the same app that they hail rides. Riders will simply scan on QR code located on the center of the steering mechanism, and start riding the scooters. The company reports that rides cost $1 to start and $0.15 per minute afterward.
With Uber and Lyft hot to beat one another to their respective IPOs, it will be interesting to see how the market prepares for these two ride-hailing behemoths to enter the space.
As Tesla (TSLA) Stock Price Consolidates, What Should You Watch?
In the past few weeks, Tesla Inc. (NASDAQ:TSLA) stock price has been making headlines for various reasons. Currently, the electric vehicle maker is making headlines after its decision to reintroduce unlimited supercharging for owners of the Model S sedan and Model X cars.
Unlimited free supercharging for Model S and Model X
This is not the first time the company is offering free supercharging benefits and this shouldn’t be a big deal. However, for investors who are reading between the lines, this can be unsettling for Tesla stock price. Investors are still not sure what motivated the decision to bring back the free supercharging for life hardly a year after it was phased out.
[Special Report] On-Demand Tech Companies Hit Billion-Dollar Valuations; Here’s How Investors Can Capitalize In The Market
It is expensive for the company to power cars of customers for life when it has been facing unprofitability issues. The company has been laying off employees and cutting costs to show that it can be profitable in the long-term. Following the announcement of Q2 earnings Tesla stock dipped 10% after the company announced a net loss of around $408 that was almost three times what Wall Street analysts had predicted on a per-share basis.
Free supercharge for life to boost sales of Model S and Model X cars
The return of free charging is a desperate move by Tesla as it looks to boost sales of the Model S and Model X vehicles. For months bears have argued that the low-margin Model 3 car is the reason there is low demand for these premium profitable models.
For instance, in Q2 Model X sales were down 40% while Model S registrations dropped 54% in California which by far is Tesla’s biggest market. On the other hand Model 3 sales doubled in the quarter. Although this might look like good news for the company it is nonetheless not if the low margin Model 3 is eating into the demand for higher-margin models.
If the company at some point phased out free supercharging then it will be pulling forthcoming sales forward. That with disappearing tax credits may help in creating a future demand vacuum for Model X and Model S vehicles.
Auto Stock Prices In Jeopardy After Latest Earnings Reports From Ford & Tesla
After disappointing earnings, both Ford stock price and Tesla stock price fall
The automobile industry has been through its fair share of troubles over the past few years, due to a range of factors. However, it cannot be denied that one company that has been going through a prolonged churn is Ford, one of the giants of the industry.
On the other hand, electric car manufacturing giant Tesla has had a rollercoaster ride for years now. That continues to be the case for the company. This week, both these companies released their Q2 2019 earnings and the results proved to be disappointing.
Ford Stock Price
Ford Motor Company (NYSE:F) released its earnings on Thursday. Unfortunately, the results proved to be a major disappointment for investors. In addition to that, the company’s projections for the full year also proved to be well short of expectations.
Back in April, the shares had attained the biggest gains in a decade after the carmaker beat expectations, but the second-quarter results have dented the stock considerably. The Ford stock price declined by as much as 7.45% following the results, which is the biggest single-day fall since January 17 and the next few days could prove to be crucial.
On the other hand, the earnings for the full year were projected to be in the range of $1.20 and $1.35 a share. Analysts had expected earnings of $1.40 a share.
Tesla Stock Price
On the other hand, electric car maker Tesla Inc (NASDAQ:TSLA) may have generated record deliveries. But the company’s losses widened and the resignation of co-founder J. B. Straubel didn’t help matters either. However, one of the bigger reasons behind the Tesla stock price tanking by as much as 14% on Thursday was the fact that CEO Elon Musk seemed to backpedal on his promise about turning a profit in the remaining quarters this year.
Although Musk did reiterate the company’s quest to turn a profit in the next two quarters, he seemed to stress more on the growth of volumes and enhancement of production capacity. Analysts believe the company needs to increase its margins if it wants to become a serious player in the industry.
Tesla Stock Price Makes Smart Recovery; Production, Sales Jump
Tesla stock price has made a recovery, no matter how brief it may be. New light on the company’s production could be a key factor in recent moves for TSLA stock
Tesla Inc (NASDAQ:TSLA) may have had a highly disappointing start to 2019 when it reported shrinking deliveries. Naturally, Tesla stock price dove as well. However, in its latest quarter, the electric car manufacturing generated record-breaking delivery figures. All of a sudden it became a far more attractive proposition for investors.
Key Drivers For Tesla Stock Price
In addition to better delivery data, there are many other factors generating interest on Tesla stock price. It has emerged that Tesla plans to consolidate its position as the leader of the electric car manufacturing industry. The company is ramping up hiring. It is trying to take its production capabilities to higher levels in the coming quarters.
It is important to note that optimism around TSLA stock has been bullish since June. Thus far it has rallied by as much as 35% during the period. The news about the hiring spree from Tesla came after a leaked e-mail. The e-mail mentioned Tesla will hire more workers to ramp up production at its Freemont, California plant.
The push towards higher production started from the record-breaking performance from Tesla in its latest quarter. In addition to that, the presence of the factory in Shanghai will also allow the company to raise production capabilities. It could also help Tesla reach its annual target of 400,00 deliveries.
Earnings Forecast For Tesla
Analysts estimate that the loss per share for 2019 will be $1.68, which is lower than the previous estimate of $1.79. On top of that, analysts have also estimated that Tesla is going to have $5.05 worth of profits per share next year. That is definitely a significant argument in favor of Tesla stock. That being said, other factors like subsidies and geopolitical factors could impact the stock. Investors should be careful about those risks as well.
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