Friday Mar.29, 2019

3-2-1 Lyft-Off...

_Your Lyft Pool is now arriving_
_Your Lyft Pool is now arriving_

Hey Snackers,

Long week? At least you didn't learn you made 220M errors over the past decade. Goldman did.

Markets are more distracted by today's Lyft IPO — The biggest US IPO since 2017.

IPO'd

Lyft IPOs today with 1 message: "We care"

“There are going to be competitors. And we will kill them”... -- Travis Kalanick, Uber co-founder, circa 2011. Three years later, Lyft rejected a low-ball takeover offer from Uber. And even though Uber's expected to have a bigger IPO this spring, today Lyft gets to list its shares publicly first at a valuation of $24B.

Cars, drivers, and riders have feelings, too... That was a core message from Lyft's roadshow — The multi-week tour to generate interest from big-time investors. It dropped words like "holistic" and "mindful," and got nostalgic about its mission-focused carpooling origins. Its IPO docs added some key numbers, too:

  • 39%: That's Lyft's piece of the US rideshare market, which doubled over the last 2 years of #deleteuber.
  • $2.2B: That's Lyft's revenue, which also doubled from just last year.
  • $62-$65: That's how much Lyft expected (at first) to sell shares for. But after enthusiasm and a good roadshow, it's selling them this morning for $72.

US Transportation's a $1.2T market... And Lyft's interested in all of it. So far it's got bikes, scooters, rides, big rides, and carpools. But the mission-oriented co-founders Logan Green and John Zimmer want more. Unlike Uber though, which is targeting the world (+ food delivery), Lyft has so far just stayed local in the US and Canada.

Sue

Facebook sued for discriminatory housing ads

0 days since getting sued... Facebook was taken to court Thursday by the Department of Housing and Urban Development ("HUD"), which has a problem with Facebook's advertising platform. Since ads make just about all of Facebook's money, investors have a problem too.

Advertisers want to put a roof over the head... of certain Facebook users. And that's not ok. Here's what HUD filed with the courts:

  • The complaint: Facebook allowed real-estate companies to target their ads to users based on "race, color, national origin, religion, familial status, sex, and disability."
  • The law: The Fair Housing Act of 1968 prohibits discrimination in housing based on "protected class." Basically, all those characteristics mentioned above.

The law only goes so far... Anti-discrimination laws apply to housing, employment, and credit/lending products. Anything else is up to Facebook. Will it let advertisers target only us for a Game of Thrones roller disco, excluding grandad? Probably. But where does it draw the line? Get ready for more controversy.

Quit

Wells Fargo's "turnaround" CEO suddenly quits

Established in 1867. Re-established in 2018... Digressed in 2019. Tim Sloan became Wells Fargo's CEO 2.5 years ago to fix its problems. Now, a month after he testified to Congress that he wasn't going anywhere, he is.

Here's a small sampling... of the dozen+ scandals Sloan was dealing with. The diversity of violations is almost impressive:

  • Fake accounts: Over 2016 and 2017, insane sales quotas pushed Wells Fargo associates to open up to 3.5M fake bank accounts and 500K fake credit cards.
  • Failed tests: The Federal Reserve makes banks prove they're fit and following the rules. Wells failed Fed tests in 2016, 2017, and 2018.
  • And more: Wells has been sued and/or fined during Sloan's tenure for discrimination, overcharging customers, poor compliance, and abusive car and home loans.

Banks are living their best lives right now... and that makes Wells' situation look even worse. Its stock is at the same level it was 5 years ago. Meanwhile, JPMorgan's is up 67% and Bank of America is up 62%. The fines didn't just hurt their financials — They distracted Wells execs from investing in the strategies that are now powering its competition.

What else we’re Snackin’

  • Whoa: Wow, the Icelandic budget airline, cancels all its flights because the company suddenly collapsed
  • Hard-Knocks: MedMen, the "Apple Store of cannabis," is struggling because of lower prices from illicit street dealers
  • Snuffed: Disney's banning vaping and big strollers from its theme parks
  • Clearance: Palantir snags $800M government contract to build the Army's future battlefield software

Friday

  • Lyft's IPO
  • Earnings from CarMax

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