4 ms·

This is reminding me of the dotcom boom, the markets are badly overvaluing a lot of tech companies in my opinion anyways.

ChuckMcM 8y ago
Critically though it isn't retail investors who would bear the cost of a failure, that would be born by the folks like Softbank and the hedge funds who have invested. Of course the employees are also victims. I have been in the situation of holding untradeable (by me) stock being valued a high number (woohoo! I'm rich) only to watch helplessly as it became worthless (uh, I'm not rich). While the value of things change is understandable intellectually it is also painful.
- DenisM 8y ago
  It's somewhat Marxist, don't you think? The capital from the capitalists is "redistributed", spent by Uber on salaries and various purchases (more salaries). The working class collects their salaries, roughly commensurate with the cost of living (aka "according to their needs").
  - anoncoward111 8y ago
    The only problem is that the original seed loans were created out of thin air through inflationary monetary policy :) And maybe that a better activity should have subsidized.
- richardknop 8y ago
  > Critically though it isn't retail investors who would bear the cost of a failure, that would be born by the folks like Softbank and the hedge funds who have invested. This is highly optimistic. A failure of a big startup such as Uber could easily start a chain reaction, failure of other similar big unicorns, perhaps steep losses in stock market, spreading panic etc. It could easily could get to a point when government bails out the investors and banks in some way, just so they don't lose money. This is more likely scenario in my case.
  - philipodonnell 8y ago
    Nah. The irony is that while staying private, being combative with governments and relying on independent contractors to operate their business allowed them to reach this size, it also prevents them from having any leverage to ask for a bailout. No jobs to save. No retail investors to protect. No switching costs. No feel-good story for a politician to get behind. If Uber fails it'll get parceled up by the remaining players in a heartbeat, either by selling parts of itself (at best) or everyone just switching.

ChuckMcM 8y ago

Critically though it isn't retail investors who would bear the cost of a failure, that would be born by the folks like Softbank and the hedge funds who have invested. Of course the employees are also victims. I have been in the situation of holding untradeable (by me) stock being valued a high number (woohoo! I'm rich) only to watch helplessly as it became worthless (uh, I'm not rich). While the value of things change is understandable intellectually it is also painful.

DenisM 8y ago
It's somewhat Marxist, don't you think? The capital from the capitalists is "redistributed", spent by Uber on salaries and various purchases (more salaries). The working class collects their salaries, roughly commensurate with the cost of living (aka "according to their needs").
- anoncoward111 8y ago
  The only problem is that the original seed loans were created out of thin air through inflationary monetary policy :) And maybe that a better activity should have subsidized.
richardknop 8y ago
> Critically though it isn't retail investors who would bear the cost of a failure, that would be born by the folks like Softbank and the hedge funds who have invested. This is highly optimistic. A failure of a big startup such as Uber could easily start a chain reaction, failure of other similar big unicorns, perhaps steep losses in stock market, spreading panic etc. It could easily could get to a point when government bails out the investors and banks in some way, just so they don't lose money. This is more likely scenario in my case.
- philipodonnell 8y ago
  Nah. The irony is that while staying private, being combative with governments and relying on independent contractors to operate their business allowed them to reach this size, it also prevents them from having any leverage to ask for a bailout. No jobs to save. No retail investors to protect. No switching costs. No feel-good story for a politician to get behind. If Uber fails it'll get parceled up by the remaining players in a heartbeat, either by selling parts of itself (at best) or everyone just switching.