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Dear Mr. Berko: You certainly called Lyft correctly. Because it鈥檚 way down, is it a buy? Do you think Uber will profit by Lyft鈥檚 experience? If so, I might buy Uber to recover my losses on Lyft.

N.C.

Oklahoma City

Dear N.C.: As Mr. Gump said: 鈥淪tupid is as stupid does!鈥�

Lyft came public at $72. And berserk mobs of screaming meatheads and dunderheads feverishly pushed the share price to $88. Subsequently, Lyft imploded and lost more than 30 points. It鈥檚 still too high!

Lyft鈥檚 value isn鈥檚 supported by physical assets, revenue growth or earnings. It鈥檚 supported by bunkum, baloney and stupidity. When Lyft鈥檚 180-day lockup period ends in October, enabling insiders to sell shares, the shorts will have a party. There鈥檚 nothing about Lyft that encourages me to recommend the stock.

Uber filed for an IPO shortly after Lyft, and will try to drive more cautiously. The filing will be similar to Lyft鈥檚, yet won鈥檛 stop traffic or ring bells 鈥� it will be priced about 25 percent lower than anticipated originally.

As I commented in a column weeks ago, there are three major reasons to own a stock: 1, improving revenues; 2, improving earnings; and 3, good or improving dividends. Uber has improving revenues, but that growth is being eroded by brutally competitive markets. Uber remains the ride-share leader in every country it operates in, but in the past year, its ride-share market position in nearly every market, especially the U.S. and Canada, has been truncated. Unfortunately, few stupids consider that a negative.

Uber has burned through $13 billion in greenbacks since launching in 2009 and has lost money every year. Uber lost $2.8 billion in 2016, $4.5 billion in 2017 and, thanks to last year鈥檚 sale of its Asian franchises, lost only $1.8 billion in 2018. Yet that鈥檚 enough $2 bills to dam the Mississippi River at Natchez, Biloxi and Vicksburg. The losses will continue, and management has no idea when Uber will earn a profit.

As most readers know, I consider dividends and dividend growth critically important to my investment thesis and seldom recommend non-dividend-paying stocks. If an issue has exceptional growth and earnings potential and doesn鈥檛 pay a dividend, there are times when I鈥檇 recommend a position. But those times are few, and Uber doesn鈥檛 qualify. Some say if a miracle happens and Uber posts a profit, management may not be able to pay a dividend until 2031. But my two Malamute puppies, Abbott and Costello, won鈥檛 be around to enjoy the vigorish.

I doubt any new shareholders have a profit in Lyft. After the 180-day lockup period ends, initial shareholders may sell millions of shares they鈥檝e held for years. Prior to Lyft鈥檚 flop, Uber believed it could sell enough shares to value the company at $120 million to $125 billion! Now CEO Dara Khosrowshahi should be spending time in the amen corner of his church, praying the stupids will value Uber鈥檚 IPO at $100 billion. However, I can鈥檛 imagine how a company with slowing revenue growth, definite and continuing future losses, zero earnings in sight and no dividend for maybe 12 years could have a $100 billion valuation. A $100 billion valuation says Uber is worth more than Eli Lilly, which made $6.5 billion, or Nvidia, which earned $4.4 billion, or the immensely profitable Union Pacific and Norfolk Southern railroads.

The werewolves of Wall Street 鈥� JPMorgan Chase, Credit Suisse and Jefferies 鈥� that took Lyft public don鈥檛 give a hoot about the client. Knowledgeable as they are, they certainly knew Lyft would crash and investors would lose hundreds of millions of dollars. And the Street鈥檚 werewolves who鈥檒l take Uber public know that the company won鈥檛 maintain a $100 billion valuation, but they鈥檒l recommend the stock anyway. There鈥檚 a difference between honesty and full disclosure. Honesty tells you the facts as stated are correct. Full disclosure tells you about ALL the facts!

Address your financial questions to Malcolm Berko, c/o The Daily Journal of Commerce, P.O. Box 8303, Largo, FL 33775, or email him at [email protected]. 漏 2019 Andrews McMeel Syndication