A Brief Introduction to LUPA Stocks
Technological advancements have always changed the economic landscape throughout history. Just take a look at the invention of the locomotive or the personal computer. Lately, you have seen the rise of the mobile app which has disrupted markets and created new business opportunities for many entrepreneurs and companies. Fortunately, as an investor you can take advantage of this phenomenon by investing in what is known as LUPA stocks.
What are LUPA stocks?
The acronym LUPA refers to four major companies that originated from the rise of the mobile app phenomenon. These companies which are now publicly traded on the stock market are Lyft, Uber, Pinterest, and Airbnb.
Originally named Bounder Web, Inc. when it was founded in 2007, Lyft has quickly become one of the leading companies in the burgeoning rideshare market space. Based in San Francisco, the company renamed itself to Zimride in 2008 and then in 2012 it rebranded as Lyft. Logan Green and John Zimmerman are the company’s founders and are now the CEO and President of the company.
The main competitor to Lyft is Uber which was founded in 2009 by Travis Kalanick and Garrett Camp as UberCab. The company has grown considerably and has expanded its services repertoire to include trucking, scooter rental, and food delivery. In 2011 the company changed its name to Uber.
The mobile app Pinterest is a platform which allows users to share photographs through an online pinboard. Founded in 2010, the company is now headquartered in San Francisco and has expanded exponentially with offices located across the globe. Approximately half of Pinterest users are located outside of the U.S. Pinterest began selling on the public stock market after its IPO in April 2019.
After launching in 2008 Airbnb has significantly restructured the travel industry with its peer-to-peer lodging rental platform. The mobile app connects travelers looking for short-term lodging with everyday individuals looking to make some extra money by renting out a spare room or even just a couch. Since then, the platform has grown to include tourism services. Airbnb was founded by Nathan Blercharzky, Brian Chesky, and Joe Gebbia.
Of course, as with any other type of investment, LUPA stocks do come with certain risks for investors. For example, Uber and Lyft have struggled to gain profitability with Lyft only recently reporting its first profitable quarter. Uber has yet to turn in a profitable quarterly report.
Also, both of these rideshare companies along with Airbnb have run into serious regulatory hurdles. These companies have received strong pushback from local governments, hindering their expansion efforts.
Additionally, during times of high inflation most technology stocks tend to struggle and experience volatility.
As you can see, investing in LUPA stocks requires you to make a risk assessment. Whether or not these stocks or any other types of investment assets make sense for your portfolio will depend greatly on your tolerance for risk. How much capital you have available, and your financial circumstances will also make a difference.
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Opinions expressed are those of the author and are not necessarily those of Raymond James. Investing involves risk and investors may incur a profit or a loss regardless of strategy selected.