7 ms·

If I could bet against Uber, I would do it

by konschubert 10y ago

intrasight 10y ago
How would one short a pre-IPO company. Betting sites?
- deleted 10y ago
  [deleted]
- matthewaveryusa 10y ago
  There's a startup, dotblu I believe, that allowed you to bet on anything. It was with fake blupoints, but I think their plan was to then transform the site into a general purpose betting platform where folks like you would shell out real money on a well defined bet. I think they pivoted to do esport betting.
  - stevenj 10y ago
    According to Crunchbase, DotBlu has closed. https://www.crunchbase.com/organization/dotblu#/entity https://www.crunchbase.com/organization/dotblu#/entity
- epistasis 10y ago
  The difficulty of shorting something like Uber is getting the timing right. Not only do you have to bet that Uber is over-valued, you also have to bet about the timing of when Uber runs out of starry-eyed investors to fuel the valuations. That is dependent on when it runs out of money, how quickly Uber decides to burn, and when the financials become clear enough to enough people that the public decides that the emperor has no clothes. (If it's actually the case that the emperor has no clothes.)
  - intrasight 10y ago
    We did see the same doubters in the early days of Amazon. And we see how that turned out. Personally, I'm not confident of either success or failure with Uber. They (and their investors) are making a big gamble. In their favor is that it is a very capital-intensive gamble, and I don't see any other companies stepping forward to make that investment. A large car company could do so, but they've not made the transition to thinking in terms of the future "autonomous mobility services" paradigm.
    - epistasis 10y ago
      I think the doubts about Amazon were different though. The doubt was whether they would succeed at their goal, rather than whether the goal would actually constitute financial success. Wal-mart for the digital era is clearly a successful position, and Amazon didn't subsidize their product to the degree that Uber has had to.
      - intrasight 10y ago
        I respectfully disagree. Amazon MASSIVELY subsidized their service. It was commonly stated, and I believe true, that shareholders were paying for that critical 2-day free shipping.
        epistasis 10y ago
        In, say, 2006, $884M was spent on shipping and $567M in shipping revenue[1], so there was a subsidy of $317M. This was in total revenue of $10.71B[2]. That's a 3% subsidy, and is within a profit margin. Uber is a bit harder to pin down from a quick google [3]. I'm seeing $750M loss in the recent quarter, which are "largely" attributed to driver subsidies by third parties, but Uber isn't talking. Let's say $500 as a rough estimate, which is 10% of the $5B in bookings that quarter. So I guess Uber's subsidies aren't as high as I thought, but are still significantly higher than Amazon's. They both operate in cut throat industries with slim margins. Whereas Amazon invested in warehouses and their infrastructure. Uber may have something up their sleeve, and I hope they do, but it's not clear for an outside observer how they are anywhere as likely as Amazon was to have profits to justify their valuation. [1] https://www.statista.com/statistics/236503/amazons-annual-shipping-revenue-and-outbound-shipping-costs/ https://www.statista.com/statistics/236503/amazons-annual-sh... [2] http://www.wikinvest.com/stock/Amazon.com_(AMZN)/Data/Revenue/2006/Q1 http://www.wikinvest.com/stock/Amazon.com_(AMZN)/Data/Revenu... [3] https://www.bloomberg.com/news/articles/2016-08-25/uber-loses-at-least-1-2-billion-in-first-half-of-2016 https://www.bloomberg.com/news/articles/2016-08-25/uber-lose...
conanbatt 10y ago
You can. Buy a taxi medallion. In buenos aires they are worth about 25ku$S, and uber has been made illegal but is still operational.
- vkou 10y ago
  It's possible to believe that Uber's future valuation will be lower then it currently is, and also believe that the traditional taxi companies will not be the big winners. Or to believe that they will be the big winners, but not because medallions will become valuable.
stevenj 10y ago
What would you bet against? Its current and/or probable IPO valuation? That it'll be around in 10 years? Because I'd be willing to make a bet (say 1k) for Uber, depending on the terms. I'd also make a bet for Lyft, depending on the terms.

If I could bet against Uber, I would do it

intrasight 10y ago

How would one short a pre-IPO company. Betting sites?

deleted 10y ago
[deleted]
matthewaveryusa 10y ago
There's a startup, dotblu I believe, that allowed you to bet on anything. It was with fake blupoints, but I think their plan was to then transform the site into a general purpose betting platform where folks like you would shell out real money on a well defined bet. I think they pivoted to do esport betting.
- stevenj 10y ago
  According to Crunchbase, DotBlu has closed. https://www.crunchbase.com/organization/dotblu#/entity https://www.crunchbase.com/organization/dotblu#/entity
epistasis 10y ago
The difficulty of shorting something like Uber is getting the timing right. Not only do you have to bet that Uber is over-valued, you also have to bet about the timing of when Uber runs out of starry-eyed investors to fuel the valuations. That is dependent on when it runs out of money, how quickly Uber decides to burn, and when the financials become clear enough to enough people that the public decides that the emperor has no clothes. (If it's actually the case that the emperor has no clothes.)
- intrasight 10y ago
  We did see the same doubters in the early days of Amazon. And we see how that turned out. Personally, I'm not confident of either success or failure with Uber. They (and their investors) are making a big gamble. In their favor is that it is a very capital-intensive gamble, and I don't see any other companies stepping forward to make that investment. A large car company could do so, but they've not made the transition to thinking in terms of the future "autonomous mobility services" paradigm.
  - epistasis 10y ago
    I think the doubts about Amazon were different though. The doubt was whether they would succeed at their goal, rather than whether the goal would actually constitute financial success. Wal-mart for the digital era is clearly a successful position, and Amazon didn't subsidize their product to the degree that Uber has had to.
    - intrasight 10y ago
      I respectfully disagree. Amazon MASSIVELY subsidized their service. It was commonly stated, and I believe true, that shareholders were paying for that critical 2-day free shipping.
      - epistasis 10y ago
        In, say, 2006, $884M was spent on shipping and $567M in shipping revenue[1], so there was a subsidy of $317M. This was in total revenue of $10.71B[2]. That's a 3% subsidy, and is within a profit margin. Uber is a bit harder to pin down from a quick google [3]. I'm seeing $750M loss in the recent quarter, which are "largely" attributed to driver subsidies by third parties, but Uber isn't talking. Let's say $500 as a rough estimate, which is 10% of the $5B in bookings that quarter. So I guess Uber's subsidies aren't as high as I thought, but are still significantly higher than Amazon's. They both operate in cut throat industries with slim margins. Whereas Amazon invested in warehouses and their infrastructure. Uber may have something up their sleeve, and I hope they do, but it's not clear for an outside observer how they are anywhere as likely as Amazon was to have profits to justify their valuation. [1] https://www.statista.com/statistics/236503/amazons-annual-shipping-revenue-and-outbound-shipping-costs/ https://www.statista.com/statistics/236503/amazons-annual-sh... [2] http://www.wikinvest.com/stock/Amazon.com_(AMZN)/Data/Revenue/2006/Q1 http://www.wikinvest.com/stock/Amazon.com_(AMZN)/Data/Revenu... [3] https://www.bloomberg.com/news/articles/2016-08-25/uber-loses-at-least-1-2-billion-in-first-half-of-2016 https://www.bloomberg.com/news/articles/2016-08-25/uber-lose...

conanbatt 10y ago

You can. Buy a taxi medallion. In buenos aires they are worth about 25ku$S, and uber has been made illegal but is still operational.

vkou 10y ago
It's possible to believe that Uber's future valuation will be lower then it currently is, and also believe that the traditional taxi companies will not be the big winners. Or to believe that they will be the big winners, but not because medallions will become valuable.

stevenj 10y ago

What would you bet against? Its current and/or probable IPO valuation? That it'll be around in 10 years? Because I'd be willing to make a bet (say 1k) for Uber, depending on the terms. I'd also make a bet for Lyft, depending on the terms.