Out Fox The $treet

Updated - Dec. 15 Lyft continues to hold the double bottom around $10 despite the massive market sell off. The market keeps forgetting the travel sector was in a recession last couple of years. Demand shouldn't dry up in 2023.  Original article posted on Dec. 14   Lyft trades at all-time lows as investors misunderstand the financials and assign irrational bankruptcy risk to the company. The transportation network is already generating solid adjusted EBITDA profits and should generate operating cash flows soon. The stock is cheap at just 4x '23 EBITDA targets. While  Lyft  ( NASDAQ: LYFT ) has fallen to all-time lows, the company has actually started producing solid financial results. The transportation network has returned to pre-covid financial peaks, yet the company is being questioning on solvency providing a clear opportunity for  the long term. My  investment thesis  is Bullish on the strong prospects of the already highly profitable business. Rea...

Pinterest ended the year down over 20% from their initial trading price of $23.75. A lot of high profile 2019 IPOs flopped. The social media stock has the most promising valuation and path to profits. My target is still $15 with a forward EV/S multiple of 5.3x. A broken IPO can be one of the best ways to buy a great company at a reasonable price. With 2019 being a year where prominent IPOs failed to live up to expectations,  Recode   highlighted  the stocks that struggled in 2019 and unfortunately most of the stocks on the list aren't appealing after their busted IPO due to weak financials. One stock stands out with my  negative investment  thesis about to turn bullish. Read the full article on Seeking Alpha.  Disclosure: Long TWTR. Please review the disclaimer page for more details. 

Stocks to watch at week end: Lyft (LYFT) - the launch of Lyft Rentals isn't smart. The ridesharing service appears set to create another way to lose money. A prime benefit of the service is the door-to-door service where customers get a $20 ride credit each way. In essence, Lyft is giving away rides where the company already loses money in order to obtain what might only be a daily rental for $35. A lot of the service appears better for consumers, but the company is actually offering these ride credit discounts. Until Lyft can charge premium fees, avoid the stock. Canopy Growth (CGC) - the Ontario govt has approved a plan to license 20 stores a month starting next April. Canopy Growth expected 40 stores per month starting in January leaving a 300 store gap from expectations. This stock is still headed to $10. More research: Canopy Growth: Constellation Bid Appears Unlikely, For Now Stitch Fix (SFIX) - here comes the expected dip following another solid quarterly report....

California continues to move forward on AB 5 that will turn contractors into employees. Lyft already has a slim profit margin. Avoid the stock until the company formulates a business model around generating solid operating margins. My  previous work  already focused on the lack of a margin of safety in  Lyft  ( LYFT ) and the news continues to get worse. The company faces legislative issues pressuring the gig work concept while the business growth is apparently decelerating at a very fast clip. The stock doesn't appear to have reached a low yet. Read the full article on Seeking Alpha.  More commentary - WhoTrades   Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Lyft beat ridiculously conservative Q2 guidance. The actual EBITDA losses continue unabated with forecasts for losing $850 million in 2019. The contribution margin needs to reach 72% to breakeven due to massive operating expenses. The market dynamic suggests more competitive as the rideshare companies approach breakeven making Lyft uninvestable. Lyft  ( LYFT ) reported  Q2 numbers  that were far better than forecasted due to ridiculous guidance. Unfortunately, the numbers of a key competitor are a harbinger of more pain ahead. The rideshare competitors are still failing to prove how the business model can pay drivers while also undercutting traditional taxi prices and generate a positive return for shareholders. My  negative investment thesis  is only reinforced by the company's quarterly numbers. Read the full article on Seeking Alpha.  More commentary - WhoTrades Disclosure: No position mentioned. Please review the disclaimer page f...

  Investors negative on   Tesla (TSLA)   are possibly too focused on quarterly delivery numbers. Telsa has a potentially bright future in an autonomous fleet that earns owners money when they aren't using the vehicle. At least, Elon Musk sees such a future as a competitor against   Lyft (LYFT)   and   Uber (UBER) .  

Lyft priced their IPO at $72, above the original price range. The stock ended the first day nearly $9 below the opening price of $87.24. Lyft continues to follow the negative path of the Snap IPO. The   Lyft   (NASDAQ: LYFT ) IPO came out like a gangster and ended with a thud. Turns out that my   previous predictions   of a repeat of the   Snap   ( SNAP ) IPO was far too positive on Lyft with the stock ending $9 below the initial trading price. This is a bad sign that the stock is headed even lower and retail investors could end up holding the bag. Read the full article on Seeking Alpha.  Daily commentary: Out Fox The $treet - April 1 Disclosure: No position mentioned. Please read the disclaimer page for more details. 

If Uber (UBER) can't cut their EBITDA loss as projected, the IPO will bomb. Even so, a $500 million EBITDA loss is a substantial amount for a $90 billion valuation. -The company forecasted doubling its 2017 net revenue to $14.2B by this year and that its loss before interest, taxes and non-cash items would fall to $500M from last year's $1.7B.