Uber went public last week in the continuing wave of the Yearnicorn, or the year when a ton of Silicon Valley’s unicorns test the public markets – and the public’s appetite for hugely valued businesses that tend to lose a ton of money.

Guess what happened immediately after one of the biggest IPOs of the last decade?

Uber’s stock crashed faster than a drunk driver.

After bringing in a nice sum of cash to Uber, and minting the early investors a nearly 5,000% return on their money, Uber saw it’s stock plummet. How could this be? Who wouldn’t want a part of one of the hottest startups in the world?

The answer to that question, turns out, is most investors.

IPOs are not supposed to double their shareholder value in a day – if that was the case then the stock would have been supremely undervalued, and more than a few heads would roll down Wall Street. Stocks are not supposed to lose a lot of value either though, since that points to an over-evaluation and that can cause many investors to lose a nice chuck of their portfolios if their investments were based on overblown valuations.

Luckily, Uber’s stock has rebounded but this is what their stock has done over the past week:

uber goes public

You could be forgiven for thinking that things are starting to look better. The line is even green meaning that Google thinks it’s going to improve.

But remember Lyft? Yeah, things haven’t looked very good since they went public earlier this year:

lyft stock plummets

Yeah that line is definitely red. Lyft is trading at nearly half of its IPO price.

So what the hell is going on? Can we take Lyft’s situation and apply it to Uber? On some levels that would be tempting. Both are similar in terms of burn rate and losses compared to revenue. Neither have figured out how to reign in spending in order to achieve profitability. In some ways they are locked in a battle to the death: whoever stops spending first could lose valuable market share. That could tip the scales.

The question now becomes: can they continue to spend until they mend? Or will they spend until they reach a dead end? If investors don’t see the light at the end of the tunnel, they are in for some dark days.

Which is unfortunate since there has been a lot of light in the stock market over the past few years. Plant-based protein companies are bringing in huge returns after their recent IPOs. Pinterest also has seen a bit success over its first month of trading. All of this is in the general context that both the NYSE and the NASDAQ are performing well.

Is it the industry then? Is the current business model of ride-sharing untenable?

My gut feeling is yes. It seems like Uber has made a calculated gamble that they can spend until driverless cars start seriously come into the conversation. At that point, the arguments that drivers are not able to make a real living wage, and that they should be treated as employees and not contractors – giving them rights to things like healthcare – will become moot.

If Uber is able to hold onto its lead and become the pioneer that brings driverless cars to the masses – then you should buy their stock. But it all could come crashing down.

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