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VCs, employees make billions in Lyft’s IPO while drivers and individual investors lose
On Lyft’s long-awaited first day of public trading, share prices rose 21% before closing the day up 8.7%.
But as Lyft’s leaders sipped champagne, its drivers were on strike and its newest investors were already losing money. Despite investor optimism, Lyft (like Uber) still doesn’t make a profit (they lost $911m last year) or pay drivers a living wage.
Profits or no profits, people are throwing cash at Lyft
Lyft went public at a price of $72 per share (far higher than its initial range), and share prices rose as high as $87/share before ending the day at $78/share.
Lyft somehow generated 20x more interest than it had shares to sell, meaning investors wanted to sink $47B into a company whose IPO prospectus reads: “We may not be able to achieve or maintain profitability in the future.”
Everyone who got a Lyft was already on top
After raising $2.34B, Lyft hit a valuation of $26.4B (still only ¼ the projected size of Uber).
Early Lyft employees earned so much in shares and stock ($1.3B) they could buy every one of the 624 houses on the market in San Francisco and still have $300m left for housewarming parties.
Early institutional investors like Founder’s Fund, Andreessen Horowitz, and Google also made billions, but average-Joe investors who bought at the IPO’s oversubscribed opening lost 11% on day 1.
One big group wasn’t excited about Lyft’s IPO: its drivers
In Los Angeles, San Francisco, and San Diego, Lyft drivers — who often make just $10 per hour, less than California’s minimum wage — protested the misleading tactics Lyft uses to keep low-paid drivers at the wheel.
This IPO was no exception: Lyft offered its drivers IPO stock, but only in exchange for 20k rides — AKA never missing a day of work and completing 15.4 rides a day for 5 whole years (so much for that “flexible schedule” hype).
Now that Lyft is public, pressure to cut costs will increase, which could lead to even lower earnings for drivers down the road.
Another one bites the dust: Wells Fargo CEO abruptly resigns after numerous scandals
On Thursday, Wells Fargo announced CEO Tim Sloan’s resignation — the 2nd CEO in the last 2 ½ years who failed to keep their bank’s miserly hand out of the cookie jar.
Uncle Fargo has been responsible for a whole assortment of scandals in recent years: Like when its bankers created deposit and credit card accounts for millions of customers without their knowledge — a doozy that cost them $185m in fines from the Consumer Financial Protection Bureau in 2016.
To WF, $185m ain’t no thang but a chicken wing
Trouble’s been building for Wells Fargo as of late: In 2018, ol’ Wellsy was hit with a $1B fine for overcharging customers for mortgages and auto loans.
But the costly malfeasances date back to before the financial crisis, when the company began originating and charging customers for made-up overdue mortgage payments to ensure certain interest rates (this reveal ousted WF’s previous CEO, and promoted Sloan).
Last month, Sloan testified before Congress, assuring the House that the bank has put its shady practices behind them. Then, 2 days later, the company revealed in a regulatory filing that Sloan would be getting a $2m bonus for 2018 (the nail in his coffin).
Fargo’s stock jumped
But, Fargo stock soared 3.08% following the announcement of Sloan’s resignation (and the company’s decision to hire its next CEO outside of the company).
With another ill-intentioned CEO ousted, the public wants to believe one of the world’s most powerful banks still has a chance to correct the wagon.
|»||WF needs a hero|
Ohhh snap: Crackle’s poppin’ off with new joint venture
Wait — are we talking about that self-help book series? Yep — turns out, the company behind the books also owns multiple streaming channels.
CSSE announced Friday they’re teaming with Sony’s platform to form “Crackle Plus” (missing out big on the opp to call it “Soup & Crackles” but whatever…).
This movie marriage isn’t as random as it seems
Ad-supported video-on-demand (AVOD) is the space to be in these days. While Crackle was one of the AVOD OGs, several newer kids on the block (Hulu, Vudu, Roku…all the -u’s) have dug out a place in our hearts/living rooms.
So Sony has been on the hunt for a souper partner to up their game… and their final pick is streamy and delicious.
According to Variety, Crackle Plus — under CSSE’s majority control — will merge Sony’s brand, ad partnerships and content with six of CSSE’s AVOD networks and PivotShare, its subscription service.
The joint entity has lofty aims
Chicken Soup CEO William J. Rouhana Jr. claims this “will position Crackle Plus as a leading AVOD streaming platform with nearly 10 million active users… [resulting] in a manyfold increase in our recurring revenue from online networks.”
Investors seem to agree; CSSE’s share price had jumped by 36% on Friday in response to the news.
|»||Hot and streamy, indeed.|
Despite its phenomenal failure, companies can’t stop copying MoviePass
Not 1 but 2 new MoviePass clones — called Infinity and Atom — are launching new subscription movie ticket services this year.
Copycat companies are logical, even expected, but in this case, you’ve got to wonder — don’t these MoviePass mimickers know that the company they’re copycatting failed spectacularly?
Meet the 2 newest MoviePass clones
Infinity, a subsidiary of a cinema-tech company called Influx Worldwide, plans to launch its “official subscription program for cinemas” later this year.
Similarly, an online ticketing company called Atom Tickets has launched its subscription movie product, Atom Movie Access.
But it’s not just Infinity and Atom: Sinemia, AMC’s A-List, and the Cinemark Movie Club all also offer some type of movie subscription product (and yes, MoviePass is still trying to get its sh*t together, too).
A case of déjà view
MoviePass went up in flames, lost millions of dollars, and nearly bankrupted its parent company despite being the hugely popular first player in a hot new industry.
This, coupled with the fact that all of the other companies trying to build viable movie subscription businesses are also struggling to do so, would seem to make it clear that the industry is a tricky nut to crack.
Still, these 2 new startups have bold plans to dominate the movie subscription landscape with products strangely similar to MoviePass’ failed service.
|»||I’ll make the popcorn|
Time and Fast Company agree: Burrow is revolutionizing the furniture industry
You know you’re doing something right when you’re named one of Time’s 50 Best Inventions AND one of the World’s Most Innovative Companies by Fast Company in 2018.
Can you say double-dipping?
Then again, that’s what happens when you make beautiful, modern furniture flexible enough to evolve with your life… just like Burrow.
A modern, modular chill station
Sure, plenty of sofas are comfy. But clever? That’s something only Burrow has really nailed.
Their sofas, loveseats, and armchairs can be easily disassembled, moved, and even expanded to accommodate any living situation — all without a single tool needed.
Upgrading to a bigger apartment? Order an extra seat to expand your sofa. Tight on space? Strip things down for a more efficient use of space. There’s even a USB port built-in (more like Netflix & Charge).
It’s clear Burrow is a big deal, and now they’re having a big deal, too.
Get $150 off their jaw-dropping loveseat, or up to $500 off the rest of their collection, with the code TULIP2019.
P.S. Do you love design? Apply to join Burrow Lab for a chance to influence their future furniture releases & get exclusive goods.
You got surveyed
A couple of weeks ago, we asked for your help answering a few questions in a reader survey to get a better idea of your likes and dislikes of the email.
We know that long surveys are a big ask (you know what they say, time is money… or something like that), but, boy oh boy, did you all deliver.
Thousands of you responded, and y’all spent a total of 53,975 minutes filling out our little ol’ survey.
That’s right — 53,975 minutes… AKA 899.58 hours… AKA 37.4 days.
That’s enough time to listen to the entire Harry Potter series on audiobook 7 times. Or plant a crop of radishes and then harvest them and slice them up for a salad. Or ride a motorcycle from the northernmost tip of Alaska to the southernmost point in Argentina.
Point is — it’s a lot of time. But it’s time that’s going to help us make more awesome things you all love.
Special thanks to Jessica H, Denise M, Trey P, Lee H, and Annie L — the 5 of you won the raffle for $100 Amazon gift cards. Be on the lookout for some tickle cash in your mailboxes.
To the rest of you: The important thing to remember is that you’re all loved. Thanks for spending valuable time — that you could have been spent riding a motorcycle to Argentina — on us.
- Conor Grant, resident radish farmer
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