May 15, 2019

Uber's sliding shares should worry other cash-bleeding unicorns

Illustration: Sarah Grillo/Axios

Uber shares have inched higher since their first two days of dismal trading, but not nearly to the point of making all of the company's private investors whole.

Why it matters: That has got to worry other money-losing "unicorns" that operate in similar sectors.

In descending order of fear factor:

  • Micro-mobility: Bird, Lime.
    • Judging by how the public markets have treated Lyft even worse than Uber, it suggests that they are most skeptical of the "ride" story.
  • Other ride-hail: Didi Chuxing, Grab, Ola.
    • Foreign markets change the math a bit, and some of these companies have significant diversification into other areas (such as Grab Finance).
  • On-demand delivery: DoorDash, Instacart, Postmates.
    • These companies insist their have better unit economics than ride-hail, because their marketplaces are three-sided instead of two-sided. Their big question is how much value the public markets are ascribing to Uber EATS.

Of the aforementioned, only Didi and Postmates are believed to be planning 2019 IPOs. But that means many of the others will seek out new rounds of growth capital, likely from the same investors who are currently taking baths on Uber and Lyft.

If these companies' most recent financings were benchmarked to Uber's valuation, at least in part, then we could be in for a series of high-profile down-rounds. Or orphaned unicorns. These things have a tendency to feed on themselves.

The bottom line: Uber's coat-tails may have frayed.

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Illustration: Rebecca Zisser/Axios

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The big picture: Tech has been booming for so long the industry barely remembers what a down market feels like — and most companies are ill-prepared for one.

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Illustration: Aïda Amer/Axios

Public-health officials’ warnings about the coronavirus are sounding increasingly urgent, with one top CDC official asking the public yesterday "to prepare for the expectation that this might be bad."

Reality check: Other administration officials, including President Trump himself, were more subdued in their assessments. But underneath those tonal differences, the reality of the coronavirus is the same: It spreads quickly, and has already spread to many countries, making it likely to start spreading here, too.

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Exclusive: Pro-Trump group plans post-Super Tuesday blitz on Democrats

Democratic presidential hopefuls take the debate stage in South Carolina. Photo: Logan Cyrus/AFP via Getty Images

Pro-Trump super PAC America First Action is preparing to unleash a series of targeted, swing-state attacks on the Democrat most likely to face President Trump after Super Tuesday, people familiar with the group's plans tell me in an exclusive preview of its strategy.

The state of play: The group has been tracking favorable/unfavorable ratings in Florida, Georgia, Michigan, North Carolina, Ohio and Pennsylvania for 2020 candidates Joe Biden, Bernie Sanders, Elizabeth Warren, Pete Buttigieg and Michael Bloomberg — under the theory that if Trump wins each of these six states he would win re-election.