Hi traders! We are hitting up another IPO that is on it's way, this time scheduled for October 31, 2018. I found a company in my readings which I felt compelled to do some more research on, because I have never heard of it before. Maybe you have though. It's a company called YayYo. (Fun fact: apparently this is also an old term for cocaine) I think this will be our first IPO article where my official stance is to stay away, which is new for us! Let's get started!
YayYo was founded literally 2 years ago in 2016 and is headquartered apparently in Beverly Hills, CA. As I said this is one of my first companies where I will be advising to steer clear of. Our first red flag comes in just what the company IS. I have been doing research and YayYo seems to have conflicting descriptions of what it does. Some sites claim that YayYo is a ride sharing company, similar to that of Uber or Lyft. While if you go to their website directly and take a look over their prospectus, they spell out the terms for their rideshare rental company (ridesharerental.com), where employees of ride share companies can rent cars directly from YayYo's fleet of vehicles. Even further, other sites say YayYo is a price comparison app where you can directly compare prices in real time from giants like Lyft or Uber. Which it seems like the basis of YayYo itself. Almost a "Kayak" for rideshare. Whew my head is spinning. It seems to be a mystery about what this company REALLY does, whether it be one of the above things, something different completely, or all three.
YayYo is estimated to hit the NasDaq on October 31, 2018! Just a few days away people! They are offered $5,000,000 with an estimated 625,000 shares and is expected to have between a $7.00 and $9.00 IPO price. According to MarketWatch, "The company reported a gross profit of $22,579 in 2017 and revenue of $235,690." Right now it seems the only product they have going for them is their ridesharerental.com with in my opinion seems "gimmicky". If they are banking on the tech from their ride share comparison app then I wouldn't hold my breathe. Lyft apparently has barred YayYo from using it's data and has also issued a cease and desist against the company, while Uber's terms don't allow it's data to be shared between 3rd party developers or competitors. So it seems the basis of the whole app is at a stand still.
To further fan the flame, founder of YayYo, Ramy El-Batrawi has had quite a speckled past with past companies. Of which 27 of his past founded companies have been labeled inactive of dissolved. According to The Huffington Post, "In 2010, the Securities and Exchange Commission barred El-Batrawi from being an executive in a publicly traded company for five years as part of the settlement over a $130 million stock fraud case against a company he led until it collapsed in 2001." Which is never a good sign.
All of this to be said, with other ride sharing companies seeing such success, many of you may be tempted to invest in like companies. But it is important to do research on them! My official 2 cents. Your money is better spent elsewhere. I hope you enjoyed this IPO article and please let me know if you have any upcoming suggestions! You rock!
"Dream, struggle, create, prevail. Be daring. Be brave. Be loving. Be compassionate. Be strong. Be brilliant. Be beautiful." Caterina Fake