What are LUPA Stocks?
LUPA stocks are a nickname for four companies that were born into the mobile app generation and have become part of the 21st century consumer economy. They are also referred to as the PAUL stocks. They have all either filed to go public, or are rumored to be considering an initial public offering in the near future. L stands for Lyft, the mobile ride sharing company that emerged as a competitor to Uber in 2012. U stands for Uber, of course, the ubiquitous ride-sharing company that has expanded into other markets. It was founded in 2009. P stands for Pinterest, the web-based photo bulletin board that is also a social network. A stands for Airbnb, the popular short-term rental and experience platform that has revolutionized the travel and lodging industry.
All of the these companies emerged as part of the app economy and were funded by venture capital and private equity money. They have become strong brands with wide adoption and consumer loyalty, but profits have been elusive. Still, their scale and popularity have wet the appetite of the public markets, where several of them are headed to become publicly traded companies.
Lyft, the popular ride-sharing app based in San Francisco, was originally founded in 2007 as Bounder Web, Inc. It changed its name to Zimride in 2008 and then to Lyft in 2012. It was founded by entrepreneurs Logan Green and John Zimmer, who are CEO and President of the company. Its stated mission is, "To Improve people’s lives with the world’s best transportation." The company filed to go public on March 1, 2019. In its prospectus, Lyft disclosed that it had a net loss of $911 million in 2018 on $2.2 billion in revenue, and may not achieve profitability. Lyft is targeting a valuation between $21-23 billion. Fidelity Capital Markets holds more than 7% of the company's non-public shares.
Uber, Lyft's main competitor in the ride-sharing economy, has had a busy decade since it was formed in 2009 as UberCab. The brainchild of entrepreneurs Travis Kalanick and Garrett Camp, the ride-sharing app operates globally and has expanded into other businesses including food delivery, trucking and scooter rental. Its popularity - combined with criticism of what some consider to be unfair labor practices -- has caused a backlash against the company. There have been multiple lawsuits and several cities have sharply restricted or moved to ban the service. In 2017, co-founder Kalanick stepped down amid controversy and was replaced by former Expedia CEO Dara Khosrowshahi. The company has yet to file for an IPO as of March 4, 2019, but many expect it to do so in 2019 or early 2020. It was most recently valued at $120 billion, although it continues to lose money, according to its most recent financials.
Read more: The Story of Uber
The popular photo sharing online pin-up board was the vision of entrepreneurs Ben Silbermann, Paul Sciarra and Evan Sharp, who founded the company in 2010. The company claims that its platform reaches 250 million people each month. The company is headquartered in San Francisco, but has offices all over the world. Half of its users are outside of the U.S. The company has reportedly filed to go public with the SEC, but that filing does not exist on the regulator's website.
Read more: How Pinterest Makes Money
The popular peer-to-peer short-term lodging rental platform has disrupted the travel industry in ways its founders may not have imagined when it was launched in 2008. The company also has expanded into tourism services and other ventures. The brainchild of entrepreneurs Brian Chesky, Joe Gebbia and Nathan Blecharzyk, Airbnb says it provides access to more than 5 million unique places to stay in more than 81,000 cities and 191 countries. Some cities, like New York, have restricted Airbnb's ability to operate, given intense lobbying efforts from the hotel industry, as well as safety and taxation concerns. CEO Chesky and his team decided to forego an IPO in 2018, but there have been several reports indicating that the company will test the public waters in 2019 or early 2020.
Read more: How Airbnb Makes Money
These four companies are among the biggest of so-called called family of 'unicorns', which are startup companies with estimated valuations of more than $1 billion. Given their sky-high values and brand awareness, these four are among the most anticipated private companies that may test the public markets in the near future. Investors have shown they are willing to reward other technology based companies that lose money, like they did with Amazon and Netflix in their early days. While the LUPA or PAUL stocks have been able to grow their businesses backed by venture capital and private equity investments, the public markets may not be as forgiving.