Wall Street Skeptics Poke at Start-Up Bubble

“Investors are buying the future, so help them pencil out the future,” said Rett Wallace, whose firm, Triton Research, analyzes tech companies that are going public. “You can do that with Pinterest. You can’t do that with WeWork. You can’t do that with Uber or Lyft either.”

Charles Kantor, a senior portfolio manager at Neuberger Berman responsible for managing more than $5 billion, said he asks a few simple questions when considering an I.P.O. investments, including: can a company’s profit margins hold up, what kind of competition does it face, and can executives be counted on to deliver results?

“The ones that we pass on, we don’t feel comfortable with the answers that we get,” said Mr. Kantor. “It’s got to be really obvious, really quickly that they can grow.”

He did not invest in Uber or Lyft, or Pinterest, for that matter. But he did buy shares of the online pet store Chewy, which went public in June. He said its profit margins, a large potential market, and solid executive team were all reasons he was persuaded to buy.

In many ways, the current standoff between Wall Street and these giant start-ups comes down to a simple issue: price.

Because of expectations set by venture capitalists, and given the risks they face, the companies simply asked for too much.

Uber, which private investors valued at roughly $72 billion before its I.P.O., is now worth about $54 billion in the public market. Lyft, once said to be worth more than $15 billion as a private company, now has a market capitalization of roughly $12 billion.

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