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Why Upwork's stock price is falling continuously ?

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Community Guru
Mark F Member Since: Jul 10, 2018
31 of 44

That's interesting.  I tend to see most responses, well at least to reasonable questions, to contain generally enough information to answer the question based on the freelancer's experience.  Sometimes long, sometimes short, and sometimes good and sometimes bad.

 

My fear has always been to use this platform as a social media might make me want to self-promote in some fashion which is not what it is intended for.  I am not so much concerned about the rules violation as I am the ire of the other people here.  I found that this is a community that I want to be a part of, to engage and be engaged.  I would be concerned if I started treating it more as I might social media, becomming more promotion centered, that I would alienate the people here, many of whom I respect signifcantly.

 

I guess our perceptions really do become reality.

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Nichola L Member Since: Mar 13, 2015
32 of 44

@ Mark +1000 if I could. 

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Christine A Member Since: May 4, 2016
33 of 44

Mark F wrote:

 

 

I think this is a place for discussion (and arguments perhaps a bit of childish antics) but not a place to self-promote and build audience. 


I'm just here for the childish antics.

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Active Member
Royce F Member Since: Apr 27, 2016
34 of 44

I am not a professional, but I own the stock and have tried to figure out the same thing,  This is what I have found.

1.  I have not found a single professional analyst who understands the company.  It is commonly compared to Fiver, and other small "gig" jobs. A small job for me starts at $500 +.  As far as I can tell it is a monopoly on that market. Because there is no other company like it analysts can only compare apples and oranges.

2.  Leadership seems to be investing in the company's future, just like Amazon did for years.  That makes the balance sheet look bad.  At some point that should change.  If it changes in a positive way the stock will soar. If the investments do not pay off it will crash.  Right now no one knows for certain.

3.  I have seen several comments that indicate the shares have been diluted by employees executing options, issuing convertible bonds, etc.  That tends to lower the price. I have not been able to confirm this.

4.  The market is crazy right now.  Nothing makes sense.

5.  People who bought the IPO as speculation are selling becuase itis not working out for them..(I thought I had purchased after most of them had bailed.  Must have missed something because it went down after I bought, even before the current market problems.

 

I hope others, with more knowledge of real "measurable" facts can jump in and clarify some of this.

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Active Member
James M Member Since: Oct 8, 2018
35 of 44

This has worried me off and on for a while, it is perhaps a healthly worry as it is a reminder of how important it is diverse income streams. I never found anything close to a good answer to your question.

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Community Guru
Kelly B Member Since: Jan 1, 2016
36 of 44

Before the current tumble, Upwork was project to double in the next 24 months, so I bought. I've been scared to look since the last week has been so terrible, but I still think they're in a great place. Suddenly millions of people are going to see that you can get work done without having to hire full time employees. Those of us who have decent reps on here already stand to gain from that, and from the fact that the platform as a whole should do very well in this new future. (Fingers crossed)

 

I am currently turning away work left and right, trying to recruit friends to join the platform.

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Nichola L Member Since: Mar 13, 2015
37 of 44

Kelly B wrote:

Before the current tumble, Upwork was project to double in the next 24 months, so I bought. I've been scared to look since the last week has been so terrible, but I still think they're in a great place. Suddenly millions of people are going to see that you can get work done without having to hire full time employees. Those of us who have decent reps on here already stand to gain from that, and from the fact that the platform as a whole should do very well in this new future. (Fingers crossed)

 

I am currently turning away work left and right, trying to recruit friends to join the platform.


_________________________________

I think you are right,  and don't be scared to look, this is a crisis that will pass. I have shares (not in Upwork) that I thought would have dived catastrophically. They have dipped and then (who knows why) gained a bit. They will no doubt, dip again, as will Upwork - just a ship on the high seas - not rudderless yet! 

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John B Member Since: Aug 20, 2015
38 of 44

Motley Fool recently released this analysis report.  I find it the best yet on stock price valuation analysis.
https://www.fool.com/investing/2020/01/07/why-upwork-stock-is-a-value-despite-a-broken-ipo.aspx

This was pre-COVID.  The questions now might be
- Will a shift of preference to remote work benefit a remote work-centric platform.
- Will the upcoming influx of freelancers in net increase revenue or simply dilute revenue for all
- Will COVID 19 shut downs of SMB and corporate activity replicate into shut downs of job listings on our platform.

The yeller-and-barker analyst on CNBC has been hawking 'stay at home companies' as particularly valuable buy choices.  He has not changed his chirp.

Some short term "puts" served well when it was clear COVID would spread and we would be slow to respond. Caught the market in its spiral down. I am now betting on the net we have reached the relative low point and calls are the right direction to bet on.  Massive stimulus, people will have to return to work in <45 days, health risk or not, and a couple trillion in stimulus placed anywhere will raise the floor trader's spirits.

Just a personal theory.  Won't know until I know.  Fun stuff though, when it is time to know.

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Community Guru
John B Member Since: Aug 20, 2015
39 of 44

 It happens to be distressing to me, because I am a casual investor in Upwork stock. I like to own a part of companies I work with closely.  Or work within.  It gives me a reason to stay tuned into the company performance.  Which I consider valuable information so I do not have to wonder about such things.

Upwork stock price is falling because it has not yet figured out how to make substantive profit.  For the history you see - Upwork has generated, at most, cents per share on stock price.  This has occurred for a number of reasons.

- It declared an enormous number of shares when it IPO'd.  When it IPO'd at a favorable price, many share owners made a fortune.  Which is fine.  We expect that in our business.  But the downstreams were then: create a profit to sustain a profit that is way more than cents per share... because if not:

 

- Share prices will get pounded over time, as the firm has not yet turned the corner to create profit potential for institutional investors and casual investors.


The cost to the company management has been high.  The CEO of Upwork was recently relieved of his duties.  One reason maybe: this is the #1 reason CEOs get relieved.  But that is a theory, not fact. Obviously the company's Board believes in the model -- and promoted internally. The new CEO was the former head of Products and Marketing -- meaning -- the Board believes the company can turn the profit corner and specifically in relationship to the earnings-per-share.


All of this information is publically available.  You can do research and gain this information but perhaps it is new knowledge that cents per share will depress stock prices.  All questions are valid.  Researching your own questions will be a business attribute that will help you in the future. I encourage this practice.


What will happen?  Of course Upwork will turn the corner.  In its acquisition of Elance, it cleared out its primary competitor and gained the primary position of global talent provider in the upperscale ranges of services and holds its own in commodity services for lower-dollar projects.

We are seeing competition in one-off specialied services for smaller, packaged projects. Even then we see Upwork's competitive response - which is why we have specialized profiles and packaged projects that are recommended.  That is a competitive move on Upwork's part we encouarge.  The firm is a full-in competitor.  That is why I am engaged with them.

I believe casual investment will end up being a great investment.  With global dominance, a sharp, fully-engaged employee group, and a competitive spirit - it is only a matter of time.  Currently, I am tired of losing more money if I cashed out than I make on the platform.

I believe in Uwork for three reasons.  The business model is sound.  It's compeitive position cannot be matched, and the employees deliver excellent products and services in every way they touch me.

Time, patience, which is always the key to successful investing.

Any more questions?

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Community Guru
Bill H Member Since: Aug 18, 2017
40 of 44

Royce's list is great; it's missing something. Yes, analysts don't understand companies similar to Upwork. I'm not sure that's critical. Individual investors and investment clubs who do understand the Upwork business know that businesses that need work typically done in house but can be done remotely should be flooding UW and its competitors with lucrative job postings. They're not.

 

Those who don't understand aren't recommending the stock. Those that do unerstand aren't buying the stock when they should be. I hope Upwork takes that second case seriously and pivots quickly to marketing itself as the savior of businesses. We'll just wait and see.Then again, when has Upwork ever taken the advice of a freelancer about anything?

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