Financial markets are a fascinating social mechanism. When they work well, large numbers of buyers and sellers come together and employ a diverse set of investment philosophies to debate an asset’s intrinsic value. If investors do this without bias, the prices that emerge are, at least on average, correct.
Prior to going public, Lyft was priced by one style of investor – the growth-oriented venture capitalist. VCs are a notoriously optimistic bunch, which often leads to valuations in the private markets that require a lot of things to go right as a company’s story unfolds.
Now that Lyft is publicly traded, a multitude of investment styles have been brought to bear on the analysis of the company’s intrinsic value. As of this writing, that judgement has sent the stock down 25% from its IPO. In this article, I highlight the critical factors that I believe should shape the debate.
Sitting in the back seat OLEKSANDR PIDVALNYI