Odds Say Pinterest IPO Goes Down at Day 1 Close, Split on Uber IPO
- Books are offering odds that Pinterest’s IPO will be down at the close of trading on Day 1
- They’re split on how Uber’s IPO will fare by day’s end of its initial offering
- Both are slated to go public this month on the New York Stock Exchange
Will there be interest in Pinterest? How many will get on board for a ride with Uber?
These are the questions stock analysts are weighing as the two companies prepare to be traded publicly on the stock market for the first time this month.
It’s also a factor being weighed by sportsbooks. Books are of two minds when it comes to the initial public offering of each of these stocks. They’re laying odds that Pinterest shares will close down at the end of its IPO’s first day, but are on the fence when it comes to the end-of-day closing price for Uber’s IPO.
Odds on Day 1 Closing Price for Pinterest & Uber IPOs
| Company | Odds IPO Day 1 closing price is up at | Odds IPO Day 1 closing price is down |
|---|---|---|
| -140 | +100 | |
| Uber | -120 | -120 |
*Odds taken 04/04/19
Should You Pin Your Hopes to Pinterest?
Pinterest filed its S-1 in March and listed a private valuation of $12 billion. The company is scheduled to make its public debut on the New York Stock Exchange on Friday (Apr. 5).
For the uninitiated, Pinterest is a social-media network that enables users to share images of projects as well as goods and services. Pinterest was launched in January 2010. It’s designed to allow people to discover new interests visually by browsing through images that are “pinned” to the site via posts from others.
In essence, it is a virtual bulletin board. The vast majority of its users – 80 percent – are women between the ages 18-64 with children.
Pinterest steps up planning for IPO, aims to list shares on NYSE in April#Pinterest #technews pic.twitter.com/gRXyKXKIaS
— Euphorie Eworld (@EuphorieEworld) April 1, 2019
Pinterest is coming off two full years of losses. In its most recent fourth quarter, it generated revenue of $273 million and a net income of $47 million. They cut their losses from $130 million in 2017 to $63 million last year. Its stock still dropped 17 cents a share in 2018.
Will Uber Drive Upward?
Ride-sharing company Uber has an estimated value of $120 billion, currently. But the company also showed a net loss of $1.8 billion in 2018.
$UBER #pre #IPO pic.twitter.com/cKLnlPUjjL
— naashonomics (@naashonomics) April 4, 2019
The fear with both of these stock options is that the public offering may simply be designed as a method for venture capitalists to cash out their investments in the money-losing companies.
March of the Unicorns
Lyft is already being traded publicly. Pinterest, Uber and Airbnb are poised to enter the fray. It’s the largest influx of hot startup IPOs since the infamous tech bubble of 1999.
In that instance, stocks in tech companies rose dramatically upon initial release before crashing hard.
2. Second day blues for Lyft's IPO
IPO at $72, went to $87 back to $69. Suspect "greater fool theory" at work. Does not bode well for aftermarket in Pinterest, Uber etc pic.twitter.com/reNoDQX8cZ
— Rawson Lewis (@RawsonLewis) April 1, 2019
Lyft’s example should be heeded. Uber’s chief rival in the ride-sharing business, Lyft displayed a first-day gain of 8.7 percent on its IPO of $72 a share. But on Day 2, it dropped 12 percent.
Anticipate a frenzy of action and both Pinterest and Uber IPOs to be up at the closing of Day 1 trading. After that, all bets are off, as they say.
An industry veteran, Bob literally taught the course on the history of sports at Elder College. He has worked as a Sports Columnist for Postmedia, appeared as a guest on several radio stations, was the Vice President of the Society For International Hockey Research in Ontario, and written 25 books.
