Hail, Uber! Uber went public last week with great fanfare befitting the third largest Initial Public Offering in US history. Hoorah, Uber! All hail Uber!

Then, they ran into reality and reality drowned them with surge pricing.

Uber came public at the low end of the proposed range (already a huge disappointment when compared to the investment bank courtship days) and promptly fell, making it the largest first day IPO loser in US history. Hello, America.

In fairness to Uber, the markets have been reeling with the US-China trade treaty negotiation news and the imposition of tariffs and retaliatory tariffs. [Trump’s fault?]

Lyft — a competitor — was also tanking adding to the cloud over the market and the IPO world.

Nonetheless, Uber has some problems.

Uber has problems, Big Red Car?

Yes, dear reader, Uber has been beset with “issues” for some time now.

Here are the highlights:

 1. The original alpha male founder of Uber, Travis Kalanick, was ousted because of his overly bro conduct and culture. In his early days he used to call the company “Boober.” I leave you to ponder that bit of adolescent wisdom.

“You  are only young once, but you can be an immature jackass for as long as you want.”

 2. A new “apology-all-the-time” CEO was brought on to replace Travis the Kid. Dara Khosrowshahi had the mission of cleaning up the elephant parade droppings left behind by his predecessor, raising capital, and ultimately taking the company public. In two years, he accomplished a lot, but had a hard time with value.

Dara did a great job including talking London to reinstating the Uber license when its renewal was denied.

He also engineered a bunch of settlements that required Uber to write big checks, but he got a lot of elephant droppings into the recycle bin.

 3. The Uber IPO was originally promised at a $120B level (back when the investment bankers were casting about to get the assignment), but that turned out to be a pipe dream. [Pipe dreams are an analogy to smoking opium in pipes.]

 4. Uber came public at a value of approximately $72B, a huge disappointment to prior investors, a small number of whom were in at a higher value.

Do the math. Subtract 72 from 120 and get an idea of the magnitude of the disappointment.

 5. The day of the Uber IPO they had a mass of drivers conducting a work stoppage and protest, always a welcome development when meeting new investors.

 6. Uber is one of the “tech unicorns” coming public. There are those who think that Uber is not really a tech company, fair play to that thought.

There are those who contend Uber is a first mover with no moat, no patent protections, huge numbers of competitors, and has gotten its butt kicked when trying to operate overseas. Fair play to that thought also.

There are those who think Uber drivers are indentured servants and that the company is looking forward to autonomous cars so they can ditch the drivers.

 7. And, then, there is Lyft (the original pink mustache company) which went public six weeks earlier. Their chart is not a pretty thing.

Lyft IPO price $72. Lyft current price $48.35. “Light trim” haircut — 33%. Ouch.

 8. And, then, dear reader, there is the simple fact that Uber has not made a penny and lost almost $2B in 2018. The company has a lot of ground to cover to turn a profit and ultimately the P/E ratio will call for a bit of “P” — meaning profit.

What did investors buy when they bought Uber?

 9. Uber IPO price $45. Uber current price $37.79. Hello, America. That’s a 16% haircut in their second day of trading. Not good.

Bottom line it, Big Red Car

Uber was supposed to be a mega unicorn extravaganza on steroids. It was supposed to light the fire of the IPO market, but any fair minded observer of the company could see enormous problems not limited to the culture, the change of leadership, the non-tech nature of the product, the unfortunate timing, and the numbers. THE NUMBERS ARE TERRIBLE.

This has resulted in two meaningful developments:

 1. The Uber IPO disappointed coming out the door. [Lyft also.]

 2. Uber is looking for its feet as it plummets.

Those who live and breathe unicorn farts need to start thinking a bit harder. This is a shit show.

Anecdote me, Big Red Car

Once upon a time I was in NYC when it snowed. I was trapped (meaning there was snow on the ground and I had slick soled goat ropers on my feet. The Uber “surge pricing” — heightened pricing based on heightened demand sayeth Uber, “predatory” pricing say others — was more than $120 to go about a mile. I walked.

I used an Uber yesterday because I hate to try to park in downtown Austin By God Texas. Love the product. Love the drivers. Love the app. Just not a good stock?

Karma. Karma is a mean, heartless, vengeful bitch.

But, hey, what the Hell do I really know anyway? I’m just a Big Red Car.