So, let's talk about Lyft.
Today was the second day
of trading,
and Lyft is right now trading
below its IPO
price. Lyft,
the ride share company,
started trading on Friday,
and at first, everybody was excited.
But let's take a look at the charts to see
what happens here.
Lyft was already plummeting,
going down.
The IPO price was
$72. Now again,
on Friday, at first everybody
was happy. Look at this.
We were going up to
$86, all the way up here
but right now we are trading
at $69.
So, below the IPO
price. Now,
let's first talk about what does
IPO mean?
IPO means an Initial Public
Offering, means that the company is
now for the first time ever,
traded at an exchange.
You see, this is where everybody was so
hyped up about Lyft
and I remember this was
many years ago about Twitter
and Snap. Exactly the same thing.
Everybody got so excited about
this and think that they made
a lot of money if they could just
get in on this so-called IPO.
But you know what?
This is where in 2018,
there were several
IPOs. Actually 2018
and before.
Most of these IPOs
end up very badly.
Especially when they're being hyped up.
Let's take a look at some of these IPOs
here. One of the IPO is that
everybody got excited about
a few years ago,
I believe it was a couple of years ago,
was Snapchat.
Snapchat,
everybody got excited
and at first,
Snapchat started trading at $28
and look at this, went as low as
$6,
right now trading at $11.36.
So,
obviously,
that didn't work out.
Then we had ADT,
the security company,
right? They're providing
security for housing
and everybody got excited about this.
So, they had an IPO
in 2018.
January 2018 were trading
at $13.
So, they started at $11.47
and you see, exactly the same thing
happened. At first,
they went up.
They went up from $11.47 to
what? $12,
almost $13,
and then boom.
Crashed and burned,
trading at $6.25,
so down 50%.
Another one that everybody got excited about
was Spotify.
So, here, the IPO...
really, really high.
So, they started trading at $165.90
and as you can see, at first everybody got excited.
They got up to almost $200
here. $195
but then crashed to
$110.
Right now, recovering a little bit,
trading at $140
but you see,
this is why these IPOs
that everybody is getting excited about,
don't make sense.
Let me show you a few more example.
NIO. Who remembers this?
Last year everybody got excited about
the Tesla of China.
NIO started trading at $12.66,
right
up here. And look at this.
Right now, trading at $5.21.
So, also lost half
of it. Another one,
Dropbox.
Who knows the Dropbox?
We're using it actually in our company.
Let's see its DBX actually.
So, DBX is the symbol here for
Dropbox.
Look at this. The IPO at $30.45,
right now trading at $21.50.
Went up to $42
and now also cut in half.
So, out of all these IPOs
that everybody got so excited
about... I mean,
it's really hard when you are looking
at the exchanges or watching any
of the News.
CNN,
or Bloomberg TV,
or whatever it might be then you might have
heard about Lyft,
and how everybody got excited about this,
but you see,
Lyft is actually having
this same,
right now it looks like,
the same fate as most of the
other IPOs.
There were only two IPOs that were
successful.
And these are IPOs from
companies that probably nobody
cares about, right?
Here's one.
This is from GOOS.
Canada Goose holdings.
It is a clothing company,
and yes,
they started off here,
as you can see,
the IPO was at... what
is it?
Like $16?
Somewhere around that, right?
And it's now trading at $48.
So, that was a successful fund.
But again, not many people got
excited about this.
Did you know that there is a Canadian
Goose company,
which is a clothing company?
Here's another one that worked out
thus far which is DocuSign,
but as you can see,
DocuSign also very,
very rough here.
Started the IPO at
$38, went all the way up
to $68,
from there, crash down back
to $38.
So, this looked pretty,
pretty bad but DocuSign
was able to recover.
So, if we look at these... what
is it? Seven
or eight IPOs,
right?
What's happening here?
Most of them are failing
and this is what we see right now
that Lyft could actually join the
same fate here because
it started at $72,
went up all the
way to $86, but
today, on only the second
day of trading,
is already trading below its
price, its opening price
of $72.
So, today's closed $69.
Today,
down 11.85%. Hope
this was helpful to learn
a little bit more about IPOs
because I get this question asked a lot
of where people say,
OK. So,
what do you think about the Lyft IPO?
Should I get in?
And my advice...
No.
Trade what you see,
not what you think.
If this was helpful,
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Let me know if you found this helpful
to know a little bit more about what's
going on right now in the markets.
Just a more objective look
at IPOs
and how they are doing.
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