Millennials broke Wall Street... Big corporate names made big moves to cater to cord-cut and car-less customers last week. Investors appreciated Disney acting like a tech company but punished Lyft for acting too much like one.
Disruption + Profits. It’s complicated... Video-streaming and ride-hailing were born to break things. Profits were an afterthought. But investors' feelings shift when the companies move from the pre-disrupt to post-disrupt era.
- Streaming: Disney blessed us with an insane library of throwbacks, blockbusters, and TV-ish shows for silly cheap ($6.99/month), and shares popped 11% Friday.
- Ride-hailing: Since the IPO rush to buy Lyft drove the stock to $88, shares fell last week to under $60. And Uber’s IPO paperwork Thursday didn't help — Uber lost nearly $2B last year, and (by certain complex measurements) its revenue growth slowed.
Streaming's getting baby treatment. Ride-hailing has to grow up... Investors showed they’re still cool with one's unprofitability, but they're losing patience with the other.
- Disney earned Simba-worthy respect for its magically unprofitable pricing for video streaming (ESPN+ and Disney+ are expected to lose money until at least 2023).
- But since Lyft and Uber (let's go with "LUber") have been replacing local taxis for a decade, investors are ready for them to stop losing billions of dollars.
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