2019 is likely to become the biggest year in history for U.S. IPOs, with many unicorns rushing to go public and cash out before the next recession. The biggest two years in history for U.S. IPOs were 1999 and 2000, when companies raised a total of $64.67 billion and $64.8 billion, respectively. Since then, U.S. IPOs have raised an average of only $28.47 billion per year, but in 2019 U.S. IPOs are likely to raise over $100 billion!
By far, the two hottest IPOs of 2019 are expected to be Lyft and Uber. With Lyft set to have its IPO later this month and Uber set to go public later on this year, investors are about to begin searching like crazy for ways to capitalize on the upcoming hype for the Lyft and Uber IPOs! NIA believes that it has discovered the #1 way to play the upcoming Lyft and Uber IPOs!
NIA is extremely bullish on the NASDAQ stock Yandex (YNDX) and is beginning to buy call options in YNDX. Back in 2011, YNDX launched an online ride-sharing service in Russia called Yandex.Taxi, which can be best described as Russia's version of Lyft. In February 2018, YNDX's Yandex.Taxi merged with Uber in Russia, Armenia, Azerbaijan, Belarus, Georgia and Kazakhstan to create a new private company called MLU B.V.
Uber invested $225 million into MLU B.V. vs. YNDX only investing $100 million, yet YNDX received a majority 59.3% stake in the company!
In November 2018, YNDX's 59.3% owned MLU B.V. expanded into Israel by launching a new ride-sharing service called Yango to compete with Israel's market leader Gett. All together, YNDX now operates ride-sharing services in 15 countries: Russia, Armenia, Belarus, Georgia, Kazakhstan, Israel, the Ivory Coast, Kyrgyzstan, Latvia, Lithuania, Moldova, Serbia, Uzbekistan, Finland, and Estonia. On September 28, 2018, YNDX completed its 1 billionth ride during the same month that Lyft announced its 1 billionth ride.
In addition to YNDX operating the Yandex.Taxi, Uber, and Yango services in these countries, YNDX also operates the food delivery services Yandex.Eats and Uber Eats.
In 2018, YNDX's taxi business grew its revenue by 293% vs. Lyft's 2018 revenue growth of 103% and Uber's 2018 revenue growth of 43%!
YNDX's taxi business is not only growing much faster than Lyft and Uber, but it is also much closer to becoming profitable! YNDX's taxi business has seen its negative EBITDA margin rapidly improve in recent quarters from -55% in 1Q 2018, to -46% in 2Q 2018, to -14% in 3Q 2018, and to -2% in 4Q 2018. YNDX's taxi 4Q 2018 negative EBITDA margin of only -2% compares to Uber's 4Q 2018 negative EBITDA margin of -27.9%. Lyft for full year 2018 reported a negative EBITDA margin of -43.7%.
YNDX's taxi business could potentially become profitable in 2019, but nobody has any idea if or when Lyft and Uber will ever become profitable!
Overall, YNDX is already extremely profitable, reporting 4Q 2018 net income of $85.1 million for growth of 69% over 4Q 2017. YNDX's Yandex.ru is the #1 leading search engine in Russia with a larger market share than Google.ru!
YNDX has been investing big into self-driving car technology. In 2020, self-driving cars will become the #1 hottest technology space in the entire market and YNDX is well positioned to become a market leader. Already, YNDX is offering autonomous taxi services in Russia.
Yesterday, YNDX surpassed its key breakout point of $35.98 per share and closed at a new 7-month high of $36.16 per share. In February 2018 after YNDX closed on its Uber deal the stock soared to an all-time high of $44.49 per share. With the Lyft IPO coming later this month and Uber IPO later this year, we expect YNDX to reach new all-time highs in the months ahead. We believe YNDX could easily become a $50 per share stock in 2019.
We like the August 16th $37 call currently priced at $3.55. We just bought 75 calls and plan to buy a lot more.
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This message is not a solicitation or recommendation to buy, sell, or hold securities. Never make investment decisions based on anything NIA says. This message is meant for informational and educational purposes only and does not provide investment advice.
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