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This Is The Chart Uber’s Bankers Don’t Want You To See

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Contrary to the conventional wisdom about the “Amazon effect”, companies that lose tons of money with no clear path to profitability actually haven’t fared all that well in the public markets. 

Just look at Lyft, which sank below its last private valuation of $15 billion on Thursday, roughly $10 billion below its peak valuation on the day of its IPO. Snapchat is another notable example.

In fact, there appears to be a clear trend of cash-flow negative companies losing money for their investors after their IPOs. And if this trend holds for Uber, which is expected to price in the middle of its range (valuing the company at roughly $90 billion, per WSJ), a sign that demand for money-losing unicorns has started to wane, its post-debut performance could be the worst yet.

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As we learned from Uber’s S-1, the company has burned through a staggering $12.1 billion over the past five years. It even warned investors that it might never achieve profitability, even as it struggles to establish itself as the ‘Amazon of transportation’, including food delivery and self-driving taxis.

Lowered expectations for Uber’s valuation appears to have already been reflected.

Uber

Looking back at the S-1, the company’s operating loss between Q1 2017 and Q4 2018 totaled $3.03 billion.

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And here is the chart showing why now is the time to IPO (revenues and losses are both peaking).

Uber

And we imagine footage of Uber drivers protesting their low earnings by going on strike will definitely help endear investors to the stock.


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About The Author

Tyler Durden

Zero Hedge's mission is to widen the scope of financial, economic and political information available to the professional investing public, to skeptically examine and, where necessary, attack the flaccid institution that financial journalism has become, to liberate oppressed knowledge, to provide analysis uninhibited by political constraint and to facilitate information's unending quest for freedom. Visit https://www.zerohedge.com

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