Dec 10, 2018

Breaking down the Uber-Lyft-Slack IPO rush

Santa Claus rings the closing bell at the New York Stock Exchange. Photo: Roy Rochlin/Getty Images

Last week came news that Uber and Lyft have filed confidential IPO documents with U.S. securities regulators, while Slack has hired its IPO underwriter.

The temptation is to write that the companies are reacting to the public equities pullback, particularly in tech stocks, by rushing to price before the IPO window slams shut. The reality is that these plans have been in the works for months, including during the public equities surge in early Q3 and the post-Halloween sugar rush.

Moreover, filing confidentially now guarantees nothing in terms of market conditions for when these companies could actually go public. For context, Snap filed confidentially in mid-November 2016 and didn't list until the beginning of March 2017.

  • Filing confidentially now is a recognition that everything is about to shut down for a couple of weeks, so this puts them at the top of the queue once everyone's back at work on Jan. 2.
  • The "IPO window" is a real factor for smaller or even mid-sized issuers, but these three can go when they're ready, almost regardless of macro market conditions.

There's also been talk that Uber and Lyft are "racing" each other to go public first. This one is a bit more complicated.

  • In the end, first to market won't much matter. Yes, the initial issuer will set some road show narrative and valuation multiples, but it should all come out in the wash after both companies begin trading. Just ask Box and Dropbox — which is a better comp than you might reflexively think, given that Uber and Lyft are pretty different companies in terms of both scale and product offerings, despite their shared core business of U.S. ride-hail.
  • That said, these two companies really, really, really don't like each other. Some of that animosity has ebbed in the post-Kalanick era, but bragging rights remain a motivator.
  • Neither Lyft nor Uber knows when they'll be able to go public, given that they represent a new category for securities regulators (unlike, say, Slack). If there are lots of questions, then filing now ensures that the actual pricing won't leak into early summer.

Go deeper: The parallel universe of unicorns

Correction: An initial version of this story said that Slack had filed confidential IPO documents. It only has hired a lead underwriter.

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U.S. coronavirus updates: Death toll nears 11,000

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios

Recorded deaths from the novel coronavirus surpassed 10,900 in the U.S. early Tuesday, per Johns Hopkins data. More than 1,000 people in the U.S. have died of coronavirus-related conditions each day since April 1.

Why it matters: U.S. Surgeon General Jerome Adams said on Sunday this week will be "the hardest and saddest week of most Americans' lives" — calling it our "our Pearl Harbor, our 9/11 moment."

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Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 11:30 p.m. ET: 1,347,803 — Total deaths: 74,807 — Total recoveries: 277,402Map.
  2. U.S.: Total confirmed cases as of 11:30 p.m. ET: 368,196 — Total deaths: 10,986 — Total recoveries: 19,828Map.
  3. Trump administration latest: President Trump's economic adviser Peter Navarro warned White House colleagues in late January the coronavirus could take over half a million American lives and cost close to $6 trillion, memos obtained by Axios show.
  4. 2020 update: Wisconsin Supreme Court blocks governor's attempt to delay in-person primary voting delayed until June.
  5. States latest: West Coast states send ventilators to New York and other states with more immediate need — Data suggest coronavirus curve may be flattening in New York, Gov. Andrew Cuomo said.
  6. World update: U.K. Prime Minister Boris Johnson moved to intensive care as coronavirus symptoms worsen.
  7. Stocks latest: The S&P 500 closed up 7% on Monday, while the Dow rose more than 1,500 points.
  8. What should I do? Pets, moving and personal health. Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  9. Other resources: CDC on how to avoid the virus, what to do if you get it.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.

Docs: Navarro memos warning mass death circulated West Wing in January

Image from a memo to President Trump

In late January, President Trump's economic adviser Peter Navarro warned his White House colleagues the novel coronavirus could take more than half a million American lives and cost close to $6 trillion, according to memos obtained by Axios.

  • By late February, Navarro was even more alarmed, and he warned his colleagues, in another memo, that up to two million Americans could die of the virus.

Driving the news: Navarro's grim estimates are set out in two memos — one dated Jan. 29 and addressed to the National Security Council, the other dated Feb. 23 and addressed to the president. The NSC circulated both memos around the White House and multiple agencies.

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