So Uber, the ride hailing app which definitely, absolutely, positivively does NOT employ any of its drivers, is expected to go public this Friday -- and it looks like it'll be big. The presumed price is $100 a share.
But a little light reading of the firm's prospectus and...um, it doesn't look great. Here are a few highlights:
- Uber lost $3.0 billion in 2018 on $11.2 billion in revenue from its basic operations. It sold its interest in a couple of other ride-hailing firms, which enabled it to book a profit, but despite a tripling in revenue since 2016, its losses were essentially the same in both years.
- This paragraph (!!!): "The assumed initial public offering price of $_ per share is substantially higher than the net tangible book value per share of our outstanding common stock immediately after this offering. If you purchase shares of our common stock in this offering, you will experience substantial and immediate dilution."
- The company's own assessment of its tangible book value: “Our historical net tangible book value as of December 31, 2018 was $(7,620) million or $(0.02) per share.”
- As the business writer Doug Henwood points out, the word "reputation" appears 60 times in Uber's S1 filing. This is because of sexual harassment complaints, driver unrest, workplace bullying -- you name it!
- It's grand plan to automate its pesky freelancer/employee problem with autonomous self-driving cars is also a no-go apparently. From the filing: "Autonomous vehicle technologies involve significant risks and liabilities. We have conducted real-world testing of our autonomous vehicles, involving a trained driver in the driver’s seat monitoring operations while the vehicle is in autonomous mode. In March 2018, one of these test vehicles struck and killed a pedestrian in Tempe, Arizona. Following that incident, we voluntarily suspended real-world testing of our autonomous vehicles for several months in all markets where we were conducting real-world testing, which was a setback for our autonomous vehicle technology efforts."
So, my question is: Am I dumb and unable to see value here? Why on earth would someone invest in this? Uber is, by any measure, a bad business...