# Uber’s CEO Wants the Company to Be Magical. The Market Just Wants Profits.- Uber Could Save the Stock by Pulling Back on Uber Eats



## jocker12 (May 11, 2017)

https://www.barrons.com/articles/ub...ts-scooters-and-self-driving-cars-51573255222
Investors spent years inflating the value of a highly touted disruptive company, only to see billions of dollars evaporate almost overnight.

No, we're not talking about WeWork, but another SoftBank-funded company that has been damaged by the WeWork collapse: Uber Technologies (ticker: UBER). Sentiment has turned so sour that the ride-hailing company's CEO, Dara Khosrowshahi, had to plead with investors to distinguish between Uber and the troubled real estate start-up.

"We're very, very, very, very different from WeWork," he said on Wednesday at the New York Times' DealBook conference.

And yet investors are painting big money-losing companies with a broad brush. On Monday, Uber reported better-than-expected third-quarter sales of $3.81 billion, above Wall Street expectations of $3.63 billion. It posted an adjusted earnings before interest, taxes, depreciation, and amortization, or Ebitda, loss of $585 million, which was also significantly better than the $811 million analyst consensus loss.

It didn't matter. Uber's stock fell 10% on the earnings news. Uber's net loss of $1.2 billion in the September quarter just won't fly in a public market that is no longer giving the benefit of the doubt to companies making big promises about the future.

The earnings came just before Uber's initial public offering lockup period expired-six months after the IPO. The expiration frees up insiders to sell stock.

Before the company went public, _Barron's_ suggested that investors exercise caution due to Uber's elevated valuation and steep losses. Its shares are down 40% since the May IPO, priced at $45-roughly $30 billion in lost market value. The S&P 500 index has returned 8% over the same period. We're not ready to call a bottom, at least not until Uber takes drastic action to rationalize its businesses.

"Investors were more willing to look past profitability concerns when the narrative was validated by ever-increasing private market equity valuations and unchallenged growth assumptions," wrote David Schawel, the chief investment officer of Family Management, in an email. "Once the companies went public and were forced to deal with the day-to-day scrutiny of the public markets, investor psychology changed with economic viability taking center stage."

Uber seems to be counting on still more patience from investors. The company has set a 2021 target to get to break-even. "Magical companies are ones that can compound top-line growth at massive scale, improve margins, allocate capital efficiency, and do the right thing for all of their constituencies. We're working hard to be one of those magical companies," Khosrowshahi said on Uber's earnings call.

But *today*, the market wants less magic and more discipline. Some tech investors use Amazon.com (AMZN) as a defense for losing money to gain market share. But the analogy doesn't really work.

Amazon never lost that much as a public company. The technology giant grew as fast as it could while staying just above break-even. The company lost more than $1 billion just once, in 2000, as the dot-com bubble was bursting. Compare that with the $7.4 billion net loss from Uber in just nine months this year, in a relatively strong economy.

While Uber is now talking about "rationalizing" its business, the reality suggests otherwise. The company says it will invest aggressively in Uber Eats over the next 18 months, pointing to an excessive level of promotions and incentives by online food-delivery rivals. Judging by the numbers,* the company itself is a key contributor to the uneconomic market.* Uber Eats lost more than $300 million in the September quarter, with losses up nearly 70% year over year.

"*They are part of the irrational behavior that is leading to higher-than-expected cash burn*," says MKM Partners analyst Rohit Kulkarni.

So what can Uber do to get its stock moving up? The heavy investment mode with excessive promotions needs to stop. *The company should focus on its core ride-hailing business*, either spinning out, *divesting, or shutting down its money-losing e-bike, e-scooter, and autonomous-driving bets.* The Advanced Technologies Group segment, which includes autonomous driving, lost $124 million in the last quarter.

For Uber Eats, the company just told investors it needs another 12 to 18 months to assess its city-by-city potential. Uber Eats is Ebitda positive in 100 cities, but that is a small portion of the more than 500 cities where the service operates. The company tried to play down the losses, saying that 15% of its Uber Eats business accounted for half the unit's losses. If so, Uber should just shut down those money-losing areas today. Waiting 18 months will further inflame investor worries.

Analyst Kulkarni believes that Uber has other ways to improve its profitability quickly in addition to rationalizing Uber Eats. He suggests that the company exit the ride-hailing business in India or Brazil, where he estimates that Uber is losing money. "The market will cheer them divesting or reducing the losses," he says. Uber didn't respond to a request for comment about making immediate changes.

Even if Uber exits some countries, the opportunity in the ride-hailing business is still massive. In its IPO paperwork, Uber estimated a $2.5 trillion addressable market for the 57 countries in which it operates.

Uber's strong balance sheet has been overshadowed by the huge losses. The company has $12.7 billion in cash and $5.7 billion in long-term debt. And ride-hailing (without all of the platform expenses) is solidly profitable. Uber broke out $600 million in adjusted Ebitda for its Rides segment in the latest quarter. By putting the focus on its solid core business, Uber can turn around its plunging stock price.

"The appetite for the unknown and high risk in the public markets has just gone down," Khosrowshahi acknowledged at the DealBook conference. "And that has consequences." All the more reason for Uber to cut its losses, starting right now.


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## Who is John Galt? (Sep 28, 2016)

jocker12 said:


> Uber's CEO Wants the Company to Be Magical.
> 
> Uber estimated a $2.5 trillion addressable market for the 57 countries in which it operates.


Yep, absolutely!

This is what makes Über so magical - the mushrooms it serves at the boardroom table.

.


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## 1.5xorbust (Nov 22, 2017)

Yeah magic is so much more fun than reality. What CEO talks about his company being magical other Disney’s CEO?


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## Drivincrazy (Feb 14, 2016)

Magical means: "believe in my dreams, not our numbers." I don't think so.


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## Amsoil Uber Connect (Jan 14, 2015)

Disney may be Magical, and they sure know how to play upon a persons emotional side. Disney does not have to deal with real life. It's all a fantasy ( to escape from real life ) and you'd never know. Uber can't play that.


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## Stevie The magic Unicorn (Apr 3, 2018)

Amsoil Uber Connect said:


> Disney may be Magical, and they sure know how to play upon a persons emotional side. Disney does not have to deal with real life. It's all a fantasy ( to escape from real life ) and you'd never know. Uber can't play that.


Disney magic,

Nuff said


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## Wolfgang Faust (Aug 2, 2018)

Their entire management team should be fired, and replaced with people who focus on Its core business..rideshare.


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## tohunt4me (Nov 23, 2015)

jocker12 said:


> https://www.barrons.com/articles/ub...ts-scooters-and-self-driving-cars-51573255222
> Investors spent years inflating the value of a highly touted disruptive company, only to see billions of dollars evaporate almost overnight.
> 
> No, we're not talking about WeWork, but another SoftBank-funded company that has been damaged by the WeWork collapse: Uber Technologies (ticker: UBER). Sentiment has turned so sour that the ride-hailing company's CEO, Dara Khosrowshahi, had to plead with investors to distinguish between Uber and the troubled real estate start-up.
> ...


If you have SUBSTANCE
you dont need Magik.

Uber has neither.

Neither will ancient Persian Djin arise to help Dara !

Paying Drivers is your Only Salvation !

See
It was not Only money Travis accumulated.

Now
Uber only seems to accumulate ill will.

What do You Think will be the outcome ?

Board of Directors staged a coupe.

They did not fully sense the " essence" of Uber.
Their GREED BLINDED THEM.

NOW THEY MAY LOSE ALL.



1.5xorbust said:


> Yeah magic is so much more fun than reality. What CEO talks about his company being magical other Disney's CEO?


YET Disney sets its hooks in Young minds.

Walt Disney .

Browse " German Occultists".
Throw WW2 in the search
Just for the Fun of it.

Humming " Black Hole Sun"

( the Thule Society Black Sun Symbol is banned from display in Germany to this day!)


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## uberdriverfornow (Jan 10, 2016)

> "Magical companies are ones that can compound top-line growth at massive scale, improve margins, allocate capital efficiency, and do the right thing for all of their constituencies. We're working hard to be one of those magical companies," Khosrowshahi said on Uber's earnings call.


lol all this guy does is spin garbage like this

every year Uber has more revenue than the last year while having more losses than the last and the investors are stupid enough to eat it all up


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## Wolfgang Faust (Aug 2, 2018)

uberdriverfornow said:


> lol all this guy does is spin garbage like this
> 
> every year Uber has more revenue than the last year while having more losses than the last and the investors are stupid enough to eat it all up


Any company that can not be profitable with a gross 30% margin should not be in business.

Wasting money on:

UberScooters
UberBikes
UberFreight

Is a joke.

Give management UberMotorHomes
(shopping carts) and show them the door.


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## GreatWhiteHope (Sep 18, 2018)

jocker12 said:


> https://www.barrons.com/articles/ub...ts-scooters-and-self-driving-cars-51573255222
> Investors spent years inflating the value of a highly touted disruptive company, only to see billions of dollars evaporate almost overnight.
> 
> No, we're not talking about WeWork, but another SoftBank-funded company that has been damaged by the WeWork collapse: Uber Technologies (ticker: UBER). Sentiment has turned so sour that the ride-hailing company's CEO, Dara Khosrowshahi, had to plead with investors to distinguish between Uber and the troubled real estate start-up.
> ...


When the numbers are horrible - you have to get excited about nonsense


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## goneubering (Aug 17, 2017)

jocker12 said:


> https://www.barrons.com/articles/ub...ts-scooters-and-self-driving-cars-51573255222
> Investors spent years inflating the value of a highly touted disruptive company, only to see billions of dollars evaporate almost overnight.
> 
> No, we're not talking about WeWork, but another SoftBank-funded company that has been damaged by the WeWork collapse: Uber Technologies (ticker: UBER). Sentiment has turned so sour that the ride-hailing company's CEO, Dara Khosrowshahi, had to plead with investors to distinguish between Uber and the troubled real estate start-up.
> ...


Excellent article.

*UBER ARE YOU LISTENING??*


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## Uber's Guber (Oct 22, 2017)

jocker12 said:


> "They are part of the irrational behavior that is leading to higher-than-expected cash burn," says MKM Partners analyst *Rohit *Kulkarni.


LOL Rohit has jumped ship, now he's busy talking smack about Uber.


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## ABC123DEF (Jun 9, 2015)

Well, it would be the end of the world if they shut down UberEats. That means that people would have to temporarily stop playing video games or watching TV and get up off their fat arses and actually drive or WALK to McD to get 5 Big Macs, a small fry, and a diet coke. The HORROR!!! -o:


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## BAKAD (Feb 22, 2016)

Uber CEO knows its core business model is broken so he is reaching out with all these other areas etc. to placate shareholders and investors. 

Uber Eats
Uber Pool
Uber Work
Uber Health
Uber Finincial
Uber Submarines
Well, where did I read about another company doing the same??? Oh yeah! Called WeWork.

https://www.theverge.com/2019/11/8/...ses-co-working-wave-pool-company-adam-neumann
Here are the businesses that WeWork says it is going to get rid of. One is a company that makes wave pools.

Conductor, a digital marketing platform
Managed by Q, which makes software to help office teams hire service providers
Meetup, which helps people meet up for various activities
Space IQ, which makes software that helps companies manage physical workspaces
Teem, which makes conference room booking technology
Wave Garden, which builds wave pools with "game-changing artificial wave technology"
The Wing, which makes co-working and community spaces for women
*Uber you need to:*

Get rid of all the junk and focus on the core business. Make it a religion within the company to make the riders and drivers experience the best. If both are happy the business will take care of itself. Yep, that means you're going to shrink your revenue big time and raise your rates.

*It's simple, you cannot keep selling your product below costs. *


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## jocker12 (May 11, 2017)

goneubering said:


> Excellent article.
> 
> *UBER ARE YOU LISTENING??*


They need a new service to do it - UberListen.


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## goneubering (Aug 17, 2017)

BAKAD said:


> Uber CEO knows its core business model is broken so he is reaching out with all these other areas etc. to placate shareholders and investors.
> 
> Uber Eats
> Uber Pool
> ...


I don't think so. Their core business in the US is profitable I believe. They just waste tons of money in most of their other divisions.


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## ABC123DEF (Jun 9, 2015)

jocker12 said:


> They need a new service to do it - UberListen.


Uber had might as well not have ears. You can't tell it anything.


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## BAKAD (Feb 22, 2016)

goneubering said:


> I don't think so. Their core business in the US is profitable I believe. They just waste tons of money in most of their other divisions.


Sorry, but in the press Uber investors have been paying 40%+ of a ride. The only ride where they make money is pool rides, hence the reason they push it so much.


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## ABC123DEF (Jun 9, 2015)

And the drivers haven't been eating the cost of any of the ride, right? -o:


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## goneubering (Aug 17, 2017)

BAKAD said:


> Sorry, but in the press Uber investors have been paying 40%+ of a ride. The only ride where they make money is pool rides, hence the reason they push it so much.


I think that's backwards. I've read Pool is heavily subsidized by taking $ from us drivers who do the profitable trips.


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## jocker12 (May 11, 2017)

ABC123DEF said:


> Uber had might as well not have ears. You can't tell it anything.


I agree. Everything happens for a reason and nothing is random, but karma is a B, not a lady.


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## sellkatsell44 (Oct 25, 2015)

jocker12 said:


> We're very, very, very, very different from WeWork,


unfortunately, bc wework:


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## peteyvavs (Nov 18, 2015)

Uber's Guber said:


> LOL Rohit has jumped ship, now he's busy talking smack about Uber.


Rohit cashed out on Friday


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