3 ms·

Did you read the article? Do you not believe it? It says across the entire US. They're spending money because they're expanding abroad, and the lag between open

Did you read the article? Do you not believe it? It says across the entire US. They're spending money because they're expanding abroad, and the lag between opening offices / hiring people and getting rideshare is real. That's where the $1.2B loss comes from. EBITA is a reasonable way to calculate profitability, which ignores taxes and interest. Equity-based compensation is a possible concern. Do you think that they're giving away so much of they're company to employees that they can't sustain that after they start paying pure-cashing (or cash + public equity) comp? (I'd honestly be surprised, but curious to know what you think.)

rini17 10y ago
In his letters to shareholders, Warren Buffett repeatedly declared EBITDA&co. unsound, and for good reasons. They still apply.
- cat199 10y ago
  So, what did he say about EBITDA? While I haven't extensively researched, what I did find was this: """ Not thinking of depreciation as an expense is crazy. I can think of a few businesses where one could ignore depreciation charges, but not many. Even with our gas pipelines, depreciation is real — you have to maintain them and eventually they become worthless (though this may be 100 years). It [depreciation] is reverse float — you lay out money before you get cash. Any management that doesn’t regards depreciation as an expense is living in a dream world, but they’re encouraged to do so by bankers. Many times, this comes close to a flim flam game. People want to send me books with EBITDA and I say fine, as long as you pay cap ex. There are very few businesses that can spend a lot less than depreciation and maintain the health of the business. This is nonsense. It couldn’t be worse. But a whole generation of investors have been taught this. It’s not a non-cash expense — it’s a cash expense but you spend it first. It’s a delayed recording of a cash expense. We at Berkshire are going to spend more this year on cap ex than we depreciate. """ So tell me - what giant depreciation expense does uber have that is going to jive with this assessment? Disclaimer: not really an uber fan.
  - rini17 10y ago
    Your time would be spent more productively by doing the actual research instead of writing disclaimers in vain and expecting others to educate you. If Uber really is in profit by Berkshire-sound accounting standards, they could say so.

rini17 10y ago

In his letters to shareholders, Warren Buffett repeatedly declared EBITDA&co. unsound, and for good reasons. They still apply.

cat199 10y ago
So, what did he say about EBITDA? While I haven't extensively researched, what I did find was this: """ Not thinking of depreciation as an expense is crazy. I can think of a few businesses where one could ignore depreciation charges, but not many. Even with our gas pipelines, depreciation is real — you have to maintain them and eventually they become worthless (though this may be 100 years). It [depreciation] is reverse float — you lay out money before you get cash. Any management that doesn’t regards depreciation as an expense is living in a dream world, but they’re encouraged to do so by bankers. Many times, this comes close to a flim flam game. People want to send me books with EBITDA and I say fine, as long as you pay cap ex. There are very few businesses that can spend a lot less than depreciation and maintain the health of the business. This is nonsense. It couldn’t be worse. But a whole generation of investors have been taught this. It’s not a non-cash expense — it’s a cash expense but you spend it first. It’s a delayed recording of a cash expense. We at Berkshire are going to spend more this year on cap ex than we depreciate. """ So tell me - what giant depreciation expense does uber have that is going to jive with this assessment? Disclaimer: not really an uber fan.
- rini17 10y ago
  Your time would be spent more productively by doing the actual research instead of writing disclaimers in vain and expecting others to educate you. If Uber really is in profit by Berkshire-sound accounting standards, they could say so.