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Jacob: Lyft had a great quarter. The stock is only rising 4, 5%. We have Sarge Guilfoyle, one of our Real Money contributors, a sister site to TheStreet. Sarge, why isn't this stock up more? Can it go up more?

Sarge: Oh it certainly can go up higher. It's a, they're still involved in a cash burn situation even though earnings were great, even though forward guidance is fantastic. EBITA looks good. Still they only have about a 28% market share. It's twin sister Uber has about a 70% market share. They held onto that market share. So while this is good, it implies to me that the overall, the addressable market is improving overall. While people like myself who never would have taken an Uber or Lyft in the past, now we're more apt to do so. So I think how it started out with younger people who are more comfortable with this, the market is growing and with only two players that looked like they're maintaining market share, there is room to go higher even though they both are involved in serious cash burn situations. I have no position in Lyft, but because I missed that move in Lyft overnight, I bought shares in Uber and that one reports tonight, so we'll see how that goes.

Jacob: You're talking serious cash burn, but it's clear from guidance on EBITA loss guidance and just the earnings, right? That really much narrower losses, it's clear that you're getting closer to free cashflow, much closer than we thought. Isn't this? I mean I'm still surprised 4 or 5% up move.

Sarge: You can't be not surprised because what they've done is they've brought forward the exploration of their lockup period about a month to August 19th that was in September, so they're doing that to avoid a blackout period to avoid a couple of other issues with their underwriters to let to let insiders cut out. So they've freed up a lot of shares here. There's going to be huge supply come August 19th. I don't think a lot of funds are getting, are participating ahead, but I don't think I have, if you can correct me if I'm wrong. I think it's about 24% fund participation in Lyft. I don't see that going much higher until we know the supply demand situation mid to late August.

Jacob: Now you're looking at Uber, right? And with Uber you almost look at market share and say like, forget about market share between Lyft and Uber for a second. Clearly the TAM here is growing as well, or better than people had thought. Uh, is that something you look at for Uber?

Sarge: I don't love holding onto cash burn type stocks. This, this is strictly a short term trade for me. Win, lose or draw. I'll be flat this name tomorrow.

Jacob: All right, thanks Sarge.

If Lyft's (LYFT) huge earnings beat and guidance raise Wednesday afternoon is any indication of how Uber (UBER) will do on its earnings report, you'd want to buy Uber. 

RealMoney contributor Sarge Guilfoyle thinks Lyft is indeed indicating Uber is in a healthy place. 

First off, here's what Lyft reported. 

For the second quarter, Lyft posted an adjusted net loss per share of 68 cents, narrower than Wall Street's estimate of $1.07. In the year-earlier period, Lyft's adjusted loss was $8.37 a share. Revenue was $867.3 million, up 72% year-over-year and beating analysts' expectations of $809 million. And the number of active riders rose 41% to 21.8 million, beating the consensus estimate of 20.9 million. Revenue per active rider was $39.77, up 22%, beating Wall Street's estimate of $38.

For 2019, management guided for an adjusted EBITDA loss of between $850 million to $875 million, better than the previous expectation of a loss of $1.15 billion to $1.18 billion.

It seems the total addressable market for ride-sharing is looking even healthier now, making Uber attractive to Guilfoyle. 


"They {Lyft} only have about a 28% market share," said Guilfoyle. "It's twin sister, Uber, has about a 70% market share. They held onto that market share. So while this is good, it implies to me that the overall, the addressable market is improving." He added, "The market is growing and with only two players that looked like they're maintaining market share, there is room to go higher." 

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