A price for Uber has not been determined yet. Ranges go from 70 billion to 120 billion. Even with those ranges Uber is a terrible investment.
Uber has a spending problem. If the company generated a profit this would not be as bad.
What really stood out was the 2 billion dollars cost in “General and administrative”. It doubled from 2016. Management, which has not generated a profit, decided to reward themselves with an extra billion. I have no idea why a company like Uber spends 2 billion dollars on “General and administrative”. Even a billion seems ridiculous. Here is their statement from the S1 filing on the increase:
2016 Compared to 2017. General and administrative expenses increased $1.3 billion, or 131%, from 2016 to 2017. This increase was primarily due to a $598 million increase in legal, tax, and regulatory reserves and settlements associated with increased legal and regulatory challenges in 2017, and $223 million in asset impairment charges relating to our Vehicle Solutions activities, as well as a 27% increase in general and administrative headcount that resulted in $241 million in increased compensation and allocated facilities expenses to support the overall growth of our business, and a $117 million loss related to the sale of real estate and vehicles in 2017 compared to a $9 million loss in 2016.
Uber’s revenues have had tremendous increases, but their losses from operations remains steady.
I suspect price action after the IPO to look something like Lyft’s.
Welcome to the Silicon Valley mania. Companies with no earnings for the foreseeable future go public.