Zipcar Files for a $75 Million I.P.O.

[elleng]

Zipcar, the car-sharing company, filed on Tuesday for a $75 million initial public offering as its continues to expand its popular services.

http://wheels.blogs.nytimes.com/2010/06/01/zipcar-files-for-a-75-million-i-p-o/

[cbdo2007]

1. Wow, this sounds like a great investment!!!

"The company, based in Cambridge, Mass., and backed by venture capital firms including Greylock Partners and Benchmark Capital, has lost money every year since it was founded in 2000."

10 years straight of losing money!! That's quite a track record.

[Statistical]

2. Amazon lost money for over a decade.

Today it clears around a billion a year after taxes. It really would have sucked to invest in that loser company Amazon. IPO price was $18 per share however the company has split 12:1 since it IPO thus split adjusted it is $1.50 per share. It is only $126 per share today only 8400% gain in 13 years since IPO. :)

Obviously it is a high risk venture but as long as they have a path to profitability it could be worth it. That being said a lot of companies in similar situation never become profitable. They just can't get the right margins or economies of scale to make a good idea (car sharing) into a economic success.

[cbdo2007]

7. Yeah, I know these can theoretically be an incredible investment...

just a little too risky for my blood.

Besides, now that I've just read a little bit about Zipcar...I'm not even really that impressed with the concept. I'm not sure how this is different than car rental though it seems like it could be more expensive? Hmmmm. Yeah I still think I'll pass.

[Statistical]

8. I think I would pass too but...

compared to rental car it isn't that bad in terms of pricing.

$7 per hour, $60 per day. The advantage is all gas & insurance is included. Now most people who own their own car already have insurance but the idea of zipcar is to get rid of car ownership. In that instance one would be buying insurance from rental car company which is generally rather expensive.

For someone who owns a car zipcar doesn't make sense. But for someone who lives in an urban enviroment and doesn't own a car it is a pretty good deal.

Still I wouldn't invest. Americans are addicted to car culture and personal ownership of everything. It likely will take a generation for ideas of shared ownership to catch on. Also to be really popoular they would need lots of zipcars in hundreds of locations per city so there is always one close by.

[zipplewrath]

3. Gotta look at the specifics

"on paper" many companies "lose money" in their initial years. This is primarily because they are expanding, often rapidly, and their expansion costs are being paid "in cash". What has to be studied is whether their income is expanding at an appropriate rate with respect to their business expansion. The venture capital firms will attempt to make the case that this company can "go profitable" in some period of time. I'm a tad dubious, but I haven't seen the paper yet.

[mainer]

4. my son had a great recent experience with Zipcar.

He lives in the city and hates owning a car and paying for parking, insurance, etc. And he only occasionally really needs to drive anywhere. So he joined up with Zipcar and it was super convenient to just pick up a car from its street parking place, get to his gig, and then leave it back at the parking place. No hassles at all.

Seems like a really ingenious idea for city dwellers.

[tammywammy]

5. Zipcar is a great idea

I know a few people that have used it and have been pleased.

[kestrel91316]

6. We have Zipcar in SoCal, but sadly not in my neighborhood.

I DID see a ZipCar driving down the street recently and did a little happy dance.