Did Pre-IPO Uber ‘Lose’ $1.8 Billion in 2018, Or Aggressively Invest In Its 85% Market Share Dominance?

  • Uber posted $1.8 billion in losses for 2018, an improvement over its 2017 bottom line, a loss of $2.2 billion. At The Drive Stephen Edelstein says, “That’s bad news for Uber as the company looks to charm investors into an initial public offering (IPO) later this year.”

    Maybe. But maybe not.

    Focusing on the high tech taxi company’s negative profits in 2018 might be missing the bigger picture of the value it represents over a bump in the road.

    It is an understatement to say Uber has no problem making money.

    The 2017 and 2018 “losses” aren’t because of bad business. They show a very well-positioned high tech monopoly looking ahead and fearlessly sacrificing profits for growth.

    Uber has maintained unrivaled sales while aggressively expanding into new, similar niches to scoop up all the opportunities its scale and capabilities have created. Just like Amazon.

    Not only are its sales unrivaled in mobile ride-hailing, but its annual sales growth is also far beyond anything happening in the entire tech industry right now. The only other U.S. tech company currently growing sales at this level is Boise, Idaho-based semiconductor maker Micron.

    Here are some more reasons not to worry about the ride-sharing tech titan:


    A group of ten elite hedge fund managers made an astonishing $7.7 billion between them in wealth in 2018. | Source: Shutterstock

    It sold $50 billion worth of bookings for taxi rides and other services in 2018.

    The ride-share app is a massive cash gravity well, and its $11.3 billion in revenues were a 43 percent increase in its top line over the previous year’s $7.5 billion in sales.

    And with 2018 losses of $1.8 billion, Uber burned through less investor cash than the $2.2 billion it cost to run the service in 2017 or the $2.8 billion it lost in 2016.

    Uber was also able to cash out of its businesses in Russia and Southeast Asia for $1.43 billion, mitigating its losses down to a nice manageable $370 million.

    You can take an indirect approach and invest in a currently public company that has a sizeable stake in Uber’s private equity. Big Uber investors include Alphabet, Microsoft, Softbank, and BlackRock.

    After its IPO, Uber’s shares will become part of these early major investors’ balance sheets, and their stocks can get some lift out of a successful Uber IPO. You can also take a competitive approach and short Uber’s competitors like Grubhub on the stock market.

    The date for Uber’s IPO hasn’t been set, and it, along with rival Lyft, are currently getting feedback from the SEC ahead of the offering, which has been delayed because of the government shutdown.

    Source: https://www.ccn.com/did-pre-ipo-uber-lose-1-8-billion-in-2018-or-aggressively-invest-in-its-85-market-share-dominance