Why You Shouldn't Invest in Lyft's IPO / Stock

Lyft's IPO is the first of a series of highly anticipated IPOs that include Uber, AirBnB, Pinterest, Slack, and more. As such, there is an incentive for underwriters and early investors to have the Lyft IPO be successful. However, I still recommend staying away from Lyft under almost all circumstances. The three primary reasons I don't recommend buying Lyft include:

1) No Profitability
2) No Economic Moat
3) High Valuation

While many IPO companies aren't profitable, Lyft in particular doesn't seem to have an evident roadmap towards profitability in my opinion. Bullish investors point out that marketing expenses can be reduced, but the cost of drivers will likely go up as currently they barely make enough to breakeven when factoring in depreciation and gas costs due to the low efficiency of these businesses.

In the video, we discuss more reasons I suspect Lyft's path to profitability will be a difficult one and why I suspect their current high P/S multiple (relative to comps such as Expedia) is not warranted.

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