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Uber, Losing $1.8 Billion a Year, Reveals I.P.O. Filing

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  • Uber, Losing $1.8 Billion a Year, Reveals I.P.O. Filing


    Uber, the ride-hailing service that has upended transportation around the world, took a major step toward the largest initial public offering in years when it officially unveiled its finances in a prospectus on Thursday.

    The offering, which could value Uber at around $100 billion, is expected to reverberate through global financial markets and to solidify the companyís position as one of the most consequential technology firms of the past decade. The share sale would be the biggest since the Alibaba Group of China began trading on the New York Stock Exchange in 2014, and would peg Uberís value at more than four times that of United Airlinesí parent and double that of FedEx.

    But the prospectus renewed questions about how sustainable Uberís business actually is. The company said in the filing that it lost $1.8 billion in 2018, excluding certain transactions, on revenue of $11.3 billion. And the prospectus also showed that its rocket-ship trajectory for revenue growth was beginning to slow.

    Uberís archrival in North America, Lyft, went public last month at a valuation of $24 billion. But Lyft, which is also deeply unprofitable, fell below its offering price in its second day of trading as investors questioned whether it could make money. This week, Pinterest, the digital pin board company that also is losing money, set a price range for its public offering that values it below that of its last private market peg.

    One potentially major concern for Uber is that it does not appear set to turn a profit in the near future. In the United States, the company is burning cash as it battles Lyft, cutting prices for passengers and spending to recruit drivers. In other parts of the world, Uber also provides discounts to riders and incentives to drivers as competitors like Ola fight for market share. And the company is investing heavily in businesses like food delivery and scooters.

    ďWe will not shy away from making short-term financial sacrifices where we see clear long-term benefits,Ē Dara Khosrowshahi, Uberís chief executive, wrote in a letter accompanying the prospectus.

    To lessen the surprise of its losses when it did finally go public, Uber has disclosed its quarterly results for two years even though, as a privately held company, it was not obligated to do so. Still, the prospectus invites new scrutiny.

    [Here is a glossary to help make sense of Uberís jargon.]

    Uber did not disclose in the filing the valuation it is seeking from public investors; it was last valued at $76 billion in the private market. Its offering is being led by Morgan Stanley and Goldman Sachs. The companyís shares are set to begin trading next month on the New York Stock Exchange under the symbol UBER.

    In its filing, Uber said it made a profit of $997 million in 2018, largely from selling parts of its business in places like Southeast Asia and Russia. Excluding those gains, plus other items, Uber lost $1.8 billion for the year. In 2017, its net loss totaled $4 billion.
    https://www.nytimes.com/2019/04/11/t...LbscDwOdltF-rA
    "I guess I just hate the fact there is public property at all." - Mr. Raceboy.

  • #2
    I am gobsmacked that they lose so much money... and they don't even own a fleet of cars!

    How can they possibly spend so much on IT, insurance, and advertising? What the hell are they doing?
    "I guess I just hate the fact there is public property at all." - Mr. Raceboy.

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    • #3
      Apparently, selling themselves.

      Pete (thinks today is more of that)

      Comment


      • #4
        Businesses don't have to actually make a profit in the world of zero percent interest. They just have to get people to invest in the stock. Netflix is probably even worse off. Thanks government!
        "Democracy is a form of worship. It is the worship of jackals by jackasses." H.L. Mencken

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        • #5
          Originally posted by skooly View Post
          I am gobsmacked that they lose so much money... and they don't even own a fleet of cars!

          How can they possibly spend so much on IT, insurance, and advertising? What the hell are they doing?
          Salary. Itís almost always the #1 expense.
          They speak in bulletpointese leftist nutjob drivel. It doesn't matter. Nothing is as great a motivator as the chance to truly be free.
          -Mr. Raceboy

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          • #6
            Click image for larger version

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            https://news.crunchbase.com/news/und...r-loses-money/
            "I guess I just hate the fact there is public property at all." - Mr. Raceboy.

            Comment


            • #7
              All of those contain salary costs ó it isnít broken out.
              They speak in bulletpointese leftist nutjob drivel. It doesn't matter. Nothing is as great a motivator as the chance to truly be free.
              -Mr. Raceboy

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              • #8
                Yeah...but only either the red pie slice or the purple pie slice is "paying the drivers."

                Pete (can't see them fitting in any other category)

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                • #9
                  Oh, I donít think itís the driversí salaries driving costs. Iím betting marketing and c-suite.
                  They speak in bulletpointese leftist nutjob drivel. It doesn't matter. Nothing is as great a motivator as the chance to truly be free.
                  -Mr. Raceboy

                  Comment

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