Exercise extreme caution when investing in a company that obviously has no business plan beyond hoping the profit fairy eventually shows up.
I won’t quote you the whole S-1 or the pieces of it that, between them, are somewhere beyond comic-book dreams. It’s astonishing that a company would come to market with a mid-double-digit operational deficit percentage over the space of years, have no operational plan they can put before you that will make that an operational surplus (this is called a “profit”, by the way), that the “raising of capital” will in part allow some who threw their fire into that cash furnace to get it back out and replace it with yours and that it will be quite-literally legal for the village idiot to put as much of their money into the furnace as they wish.
4 replies on “Uber IPO”
I seem to recall that companies like Amazon, Facebook, eBay, PayPal, and Netflix operated in the red for several years before and after their IPOs. Or am I misremembering?
I believe that’s true of Amazon, not sure of the others. I think any economies of scale in an operation like Uber are going to be minimal though. Back a couple of years ago, when everyone was squeeing over them, it looked to me like their only hope was to get huge enough to be supported by very thin margins. When they went the self-driving car route I took that as an indication that the first strategy had failed and they needed to be tech-cool to attract still more VC money.
In any case, I don’t trust anything that relies on an obviously fraudulent term like “sharing economy.”
I agree, and certainly wouldn’t advise anyone to invest a lot of money in it. But it might be fun to buy just a few shares and hold them for a few years, see if anything happens. Like buying a lottery ticket. Worth a few dollars in entertainment value, perhaps, but not a place to put one’s retirement savings.
Great post. I have no problem with people making investments in whatever business they want but do not complain if you lose your money. What I can not stand is when people make higher risk investments or let others make those investments with their money and complain “not fair” when the lose money.