Remarkable Uber Loss

While it’s hard to imagine my readers don’t know about Uber (Uber Technologies, Inc.), here’s a definition I found on Google.com:

Uber Technologies, Inc. is an American multinational transportation network company offering services that include peer-to-peer ridesharing, ride service hailing, food delivery, and a bicycle-sharing system. The company is based in San Francisco and has operations in over 785 metropolitan areas worldwide.

Uber recently announced that, for its most recent quarter, it lost $5.2 billion, not exactly the results a company that recently went public in May 2019 would want to have to share with the world. Part of this loss included $3.9 billion in “stock-based compensation expenses” related to the IPO and an operating loss of $1.3 billion.

I also recall reading recently that Uber had laid off some 400 people in marketing. That seems like a huge number until I read further and learned that the departure of 400 people left Uber with a paltry 800 people in marketing. What can they possibly hope to accomplish with such a lean marketing staff? Kidding!

I’d avoid investing in Uber until such time as their execution control improves. They currently don’t have a price-to-earnings (P/E) ratio as earnings are below zero. With a current price of about $35 per share and earnings of zero, 35/0 is undefined. $35 a share at this point is highly speculative. Uber has a steep mountain to climb.

Photo Credit: Flickr by JamesWrigley

Thought for the week:

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” – Warren Buffet

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