Your Daily Dose of Financial News
Get digestible financial news sent to your inbox daily. Learn More

This Week: Uber, where to?

Monday, May 13, 2019 by Robinhood Snacks | Disclosures

"These Uber shares are all we have, Mr. Frodo"

Last Week’s Market Moves
Dow Jones
25,942 (-2.13%)
S&P 500
2,881 (-2.21%)
Nasdaq
7,917 (-3.03%)
Bitcoin
$6,973 (+22.89%)
10-Yr US Treasury
2.467%

Mom always told us that life's about timing.

We hit the New York Stock Exchange floor for the Uber IPO (experience it @RobinhoodSnacks) — Just hours after fresh US tariffs hit China. Tough timing.

Stocks suffered their worst week of 2019 because the US-China trade deal didn't happen. But markets rebounded Friday on the latest 'constructive' talks (never say never).

Highs
1. Who's up...

Happy conference season... Google's Apple-ish I/O event (stands for "input/output") revealed a voice assistant to screen robo-calls, "Incognito" Google Maps, and (the main event) a $399 Pixel smartphone. Unlike Apple, Google doesn't need an extra-profitable $1,000 smartphone — Its focus is making money off hoards of data from your internet use.

Some hookups abroad... Match enjoyed a 14% revenue jump last quarter, courtesy of 23% user-growth internationally. Tinder is still its alpha app, totaling 4.7M active dating users. But shares jumped over 10% on one key stat: In places where Facebook's dating feature is already rolled out, Match hasn't seen any negative impact.

Cars want all the attention... GM's Cruise Automation (a self-driving car startup it bought in '16) raised $1.15B to push forward with robotaxis (planned for later this year). Then Tesla jumped into the car insurance biz, while Ferrari closed in on an all-time high stock price, powered by sales in China.

Lows
2. ...And who's down

Angels out... Victoria's Secret won't broadcast its aggressively costumed annual fashion show on TV anymore — falling viewers and a realization that the whole thing was outdated led to the decision. But parent company L Brands dipped because the move highlights how out of touch the push-up brand became with our generation. Less catwalk, more bralette.

Expensive shave... Direct-to-consumer razor startup Harry's was acquired by the owner of Schick for a smooth $1.37B. But buyer Edgewell Personal Care fell 20% last week on word its own sales dropped 10% last quarter. Plus, the $2B cabinet-packing company (it also owns Playtex and Wet Ones) is barely worth more than the deal itself.

Break up... After two years of Facebook info scandals, we expected new tech regulation in the US. It hasn't come. But Zuck's co-founder Chris Hughes called out Facebook to be split into separate companies. Shares fell 2% last week as Hughes' words joined a Nobel Prizer (Joseph Stiglitz) and presidential candidate (Elizabeth Warren). Zuck's response: Breakup won't fix Facebook's problems.

Fresh
3. Uber's "tough timing" 8% drop on IPO day

Anti-surge-pricing... Uber stock fell 8% on Day #1 of trading. We were there for it, watching founder/ex-CEO Travis Kalanick roll up in an UberX. Uber Eats teammates handed out bagels/granola on the floor, while Employee #4 Austin Geidt rang the NYSE opening bell. Uber-style, the IPO already broke records:

  • $6 billion of Uber stock value was erased during the worst opening day loss of any US IPO.
  • It was the least profitable company ever to go public — Its loss the past 12 months was twice as big as the 2nd biggest IPO loser (ironically, that's Lyft).

"Bad IPO day" support groups... Wall Street needs one. Tech stocks tend to jump on IPO day — Over the last 24 years, they've popped 41% on average. But Uber's not the only exception:

  • Facebook: Spent its first 15 months below its IPO price. Now it's Earth's #4 most valuable company.
  • Snap and Lyft: Both lost a third of their stock value within a month.
  • Alibaba: Fell nearly 50% over its 1st year. Now it's nearly double its IPO price.
  • FYI, keep in mind: None of these past stock moves are signs of future ones — IPO stocks can be especially volatile. Always dive into a company's S-1 before jumping into its freshly-issued stock.
THE TAKEAWAY

Venture capitalists were cool with Uber's losses... Maybe public investors aren't. Uber's epic '08 pitch deck convinced private investors to invest over $20B in Uber. After Friday's IPO, it's worth $76.5B — The same valuation as three years ago. New tariffs last week and a driver strike didn't help, but unprofitability is the fundamental worry for Uber (and Lyft). Robo-drivers could solve that (ETA is TBD). Will investors wait?

What else we’re Snackin’
  • Work: 8 keys to ace the dreaded "phone interview"
  • Life: 5 ways to get someone to do what you want
  • Money: Here's how startup stock options (like Uber's) actually work
  • Venture: "Blitzscaling responsibly" — The chapter directly from LinkedIn co-founder Reid Hoffman's book
  • Crypto: How the Winklevoss twins got into cryptocurrencies after the Facebook drama (video)
  • Defined: How an Exchange-Traded Fund (ETF) works — from your Snacks team
Snacks Daily Podcast

Today's 15-minute Snacks Daily pod:

  • We were there, live for Uber's IPO. Get the behind the scenes on what we saw and heard.
  • Electronics. Toys. Chairs. Soon you'll start feeling the trade war tariffs. Last year's tariffs resulted in more Chinese imports — The opposite of their goal. Why US tariffs aren't working yet, and why you'll start noticing them now.
This Week

Our Editorial Principles
Robinhood Financial LLC and Robinhood Crypto, LLC are wholly-owned subsidiaries of Robinhood Markets, Inc. Equities and options are offered to self-directed customers by Robinhood Financial. Robinhood Financial is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at www.sipc.org. Cryptocurrency trading is offered through an account with Robinhood Crypto. Robinhood Crypto is not a member of FINRA or SIPC. Cryptocurrencies are not stocks and your cryptocurrency investments are not protected by either FDIC or SIPC insurance.

Getting “early access” to options or Web is defined as signing up with a valid email address for a spot in Robinhood Financial’s respective waitlist queues for Web or for options. Getting “early access” to Robinhood Crypto is defined as signing up with a valid email address for a spot in Robinhood Crypto’s waitlist queue. Early access to the waitlist for Web, options, or Robinhood Crypto should in no way be construed as confirmation that a brokerage account with Robinhood Financial has been opened or will even be approved for opening. Priority may be given to Robinhood Gold subscribers and existing customers of Robinhood Financial.

Free trading of stocks and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities via mobile devices or Web. Relevant SEC & FINRA fees may apply. Please see the Commission and Fee Schedule.

Robinhood Financial is currently registered in the following jurisdictions. This is not an offer, solicitation of an offer, or advice to buy or sell securities, or open a brokerage account in any jurisdiction where Robinhood Financial is not registered. Additional information about your broker can be found by clicking here.

Margin trading involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market. Before using margin, customers must determine whether this type of trading strategy is right for them given their specific investment objectives, experience, risk tolerance, and financial situation. For more information please see Robinhood Financial’s Margin Disclosure Statement, Margin Agreement and FINRA Investor Information. These disclosures contain information on Robinhood Financial’s lending policies, interest charges, and the risks associated with margin accounts.

Investors should consider the investment objectives and unique risk profile of Exchange Traded Funds (ETFs) carefully before investing. ETFs are subject to risks similar to those of other diversified portfolios. Leveraged and Inverse ETFs may not be suitable for all investors and may increase exposure to volatility through the use of leverage, short sales of securities, derivatives and other complex investment strategies.

Although ETFs are designed to provide investment results that generally correspond to the performance of their respective underlying indices, they may not be able to exactly replicate the performance of the indices because of expenses and other factors. A prospectus contains this and other information about the ETF and should be read carefully before investing. Customers should obtain prospectuses from issuers and/or their third party agents who distribute and make prospectuses available for review. ETFs are required to distribute portfolio gains to shareholders at year end. These gains may be generated by portfolio rebalancing or the need to meet diversification requirements. ETF trading will also generate tax consequences. Additional regulatory guidance on Exchange Traded Products can be found by clicking here.

Options transactions may involve a high degree of risk. Please review the options disclosure document entitled the Characteristics and Risks of Standardized Options available through https://about.robinhood.com/legal or https://www.theocc.com to learn more about the risks associated with options trading.

The cash management program is expected to be offered by Robinhood Financial LLC. The cash management program, when operational, will be an added program to Robinhood brokerage accounts and will not be a separate account or a bank account. Robinhood Financial will provide additional information on the cash management program once it is operational to help customers, including those with “early access,” to determine if they want to add the program to their brokerage account.

Robinhood Snacks newsletters and podcasts reflect the opinions of only the authors who are associated persons of Robinhood Financial LLC and do not reflect the views of Robinhood Markets, Inc. or any of its subsidiaries or affiliates. They are meant for informational purposes only, are not intended to serve as a recommendation to buy or sell any security in a self-directed Robinhood account or any other account, and are not an offer or sale of a security. They are also not research reports and are not intended to serve as the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robinhood Markets, Inc., Robinhood Financial LLC, or any of their subsidiaries or affiliates. All investments involve risk and the past performance of a security or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit or protect against loss. There is always the potential of losing money when you invest in securities or other financial products. Investors should consider their investment objectives and risks carefully before investing. The price of a given security may increase or decrease based on market conditions and customers may lose money, including their original investment. Robinhood Financial LLC, member FINRA/SIPC.

Testimonials may not be representative of the experience of other customers and are not guarantees of future performance or success. Robinhood Financial LLC, member FINRA/SIPC.

Third party information provided for product features, communications, and communications emanating from social media communities, market prices, data and other information available through Robinhood Markets, Inc., Robinhood Financial LLC or Robinhood Crypto, LLC are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any financial instrument or cryptocurrency or as an official confirmation of any transaction. The information provided is not warranted as to completeness or accuracy and is subject to change without notice. Any information about Robinhood Crypto on any Robinhood website (including www.robinhood.com and blog.robinhood.com), the Robinhood platform, e-mails, or any other communications, are meant for informational purposes only and are not intended as an offer, solicitation, or advertisement for Robinhood Crypto or any goods or services offered by Robinhood Crypto. The Robinhood website provides its users links to social media sites and email. The linked social media and email messages are pre-populated. However, these messages can be deleted or edited by users, who are under no obligation to send any pre-populated messages. Any comments or statements made herein do not reflect the views of Robinhood Markets Inc., Robinhood Financial LLC, Robinhood Crypto, LLC, or any of their subsidiaries or affiliates.

Investors should be aware that system response, execution price, speed, liquidity, market data, and account access times are affected by many factors, including market volatility, size and type of order, market conditions, system performance, and other factors.

All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk it does not assure a profit, or protect against loss, in a down market. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.

Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not currently backed nor supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. Trading in cryptocurrencies comes with significant risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, cryptocurrency markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing. Cryptocurrency trading requires knowledge of cryptocurrency markets. In attempting to profit through cryptocurrency trading, you must compete with traders worldwide. You should have appropriate knowledge and experience before engaging in substantial cryptocurrency trading. Cryptocurrency trading may not generally be appropriate, particularly with funds drawn from retirement savings, student loans, mortgages, emergency funds, or funds set aside for other purposes. Cryptocurrency trading can lead to large and immediate financial losses. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a particular cryptocurrency suddenly drops, or if trading is halted due to recent news events, unusual trading activity, or changes in the underlying cryptocurrency system. Several federal agencies have also published advisory documents surrounding the risks of virtual currency. For more information see, the CFPB’s Consumer Advisory, the CFTC’s Customer Advisory, the SEC’s Investor Alert, and FINRA’s Investor Alert.

Robinhood Crypto, LLC has a seller of payment instruments license in Georgia, with reference number 61417.

Robinhood Crypto, LLC has a money transmitter license in New Jersey, with reference number 1803456-C22.

Please note that an Alaska money transmission license does not cover the transmission of virtual currency.

Check the background of Robinhood Financial LLC and Robinhood Securities, LLC on FINRA’s BrokerCheck.

Robinhood Terms & Conditions    Disclosure Library    Contact Us    FAQ

© 2019 Robinhood. All rights reserved.