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I'd confidently state that I love capitalism, but I'm not very happy with the idea that Uber could turn 17 billion dollars into 7 billion dollars and then hand

I'd confidently state that I love capitalism, but I'm not very happy with the idea that Uber could turn 17 billion dollars into 7 billion dollars and then hand the bag to retail investors. The thing I tell myself is that the money is all going to the same place anyway. Yeah, Uber is going to cash out and bomb from their IPO price, and everyone who buys will lose. But anyone who would buy Uber is going to do any number of equally irrational things with their money, not to mention the fact that no matter who "owns" the money it will either be sitting in a bank or another asset, so it doesn't really matter. http://fortune.com/2018/03/06/how-much-money-uber-spent/ http://fortune.com/2018/03/06/how-much-money-uber-spent/

tanderson92 8y ago
Many Fidelity mutual funds managing assets of retail investors hold (private) Uber stock.
- solarkraft 8y ago
  Hm, would those be interested in keeping it private so Uber doesn't lose so much value or getting it public so they can quickly cash out?
koolba 8y ago
I have no lost sleep for retail investors who confuse speculation with investment. That’s their money and they do can as they wish. It’s the forced buy in by funds and pensions that I don’t like. Many are dictated by objective formulas like top N by market cap which may lead either Uber or Lyft to be included quite quickly. Biggest preventer for either may be the “four recent quarters of profitability” requirement. Depending on the IPO and crash timing, this could be a bad one.
- wbl 8y ago
  Active vs. Passive over the 20th century shows that active management doesn't work for the customer.
  - pmart123 8y ago
    That actually is factually misleading. Active has greatly outperformed in foreign securities net of fees: https://www.ft.com/content/d93100ca-acf4-11e6-9cb3-bb8207902122 https://www.ft.com/content/d93100ca-acf4-11e6-9cb3-bb8207902... In domestic markets, active management has not out-performed net of fees, but there are bad people in every profession: https://www.nb.com/pages/public/global/insights/the-overlooked-persistence-of-active-outperformance.aspx https://www.nb.com/pages/public/global/insights/the-overlook... You also have to remember these statistics only look at mutual funds and most of the best investors don't offer mutual fund products. Passive investing should work for many investors. I think fees though are a bigger culprit though than active vs. passive.
    - wbl 8y ago
      You linked me to a study that eliminated the bottom quarter retrospectively. I too can make money if you let me ignore all my losing trades.
- pmart123 8y ago
  Twitter was just added to the S&P 500 this year. Facebook wasn't added until 2013. https://www.reuters.com/article/us-sp500-facebook/facebook-to-join-sp-500-idUSBRE9BA1AQ20131211 https://www.reuters.com/article/us-sp500-facebook/facebook-t... The chances of Uber getting into a major index quickly is very remote. On the bright side, Uber has a CFO now :). I doubt many institutional investors will be forced to buy the stock. It will be interesting to see what percentage Uber tries to float though.
sokoloff 8y ago
By that article, Uber took in $17+ billion dollars, showed losses of $10+ billion, and created a company worth an estimated $70+ billion. Even give them a 75% haircut from there and they still broke even once you cash cow the company, harvest the tax losses in future years, and eventually wind it down. I'm not buying in at $72B, but it's not clear at all that they've destroyed investor value nor certain that they will in the future.
- crispytx 8y ago
  Sort of looks like the VCs are pumping up valuations and then looking to the public markets to then dump their investments. I can't remember who said this first, but I think it's accurate. Lot of crooked unscrupulous shit going on in the financial sector! Uber is a legit "unicorn," but $120 billion dollars??? This is the dot com bubble all over again. I know this isn't technically illegal, but it should be.
crispytx 8y ago
This man speaks the truth right here!

tanderson92 8y ago

Many Fidelity mutual funds managing assets of retail investors hold (private) Uber stock.

solarkraft 8y ago
Hm, would those be interested in keeping it private so Uber doesn't lose so much value or getting it public so they can quickly cash out?

koolba 8y ago

I have no lost sleep for retail investors who confuse speculation with investment. That’s their money and they do can as they wish. It’s the forced buy in by funds and pensions that I don’t like. Many are dictated by objective formulas like top N by market cap which may lead either Uber or Lyft to be included quite quickly. Biggest preventer for either may be the “four recent quarters of profitability” requirement. Depending on the IPO and crash timing, this could be a bad one.

wbl 8y ago
Active vs. Passive over the 20th century shows that active management doesn't work for the customer.
- pmart123 8y ago
  That actually is factually misleading. Active has greatly outperformed in foreign securities net of fees: https://www.ft.com/content/d93100ca-acf4-11e6-9cb3-bb8207902122 https://www.ft.com/content/d93100ca-acf4-11e6-9cb3-bb8207902... In domestic markets, active management has not out-performed net of fees, but there are bad people in every profession: https://www.nb.com/pages/public/global/insights/the-overlooked-persistence-of-active-outperformance.aspx https://www.nb.com/pages/public/global/insights/the-overlook... You also have to remember these statistics only look at mutual funds and most of the best investors don't offer mutual fund products. Passive investing should work for many investors. I think fees though are a bigger culprit though than active vs. passive.
  - wbl 8y ago
    You linked me to a study that eliminated the bottom quarter retrospectively. I too can make money if you let me ignore all my losing trades.
pmart123 8y ago
Twitter was just added to the S&P 500 this year. Facebook wasn't added until 2013. https://www.reuters.com/article/us-sp500-facebook/facebook-to-join-sp-500-idUSBRE9BA1AQ20131211 https://www.reuters.com/article/us-sp500-facebook/facebook-t... The chances of Uber getting into a major index quickly is very remote. On the bright side, Uber has a CFO now :). I doubt many institutional investors will be forced to buy the stock. It will be interesting to see what percentage Uber tries to float though.

sokoloff 8y ago

By that article, Uber took in $17+ billion dollars, showed losses of $10+ billion, and created a company worth an estimated $70+ billion. Even give them a 75% haircut from there and they still broke even once you cash cow the company, harvest the tax losses in future years, and eventually wind it down. I'm not buying in at $72B, but it's not clear at all that they've destroyed investor value nor certain that they will in the future.

crispytx 8y ago
Sort of looks like the VCs are pumping up valuations and then looking to the public markets to then dump their investments. I can't remember who said this first, but I think it's accurate. Lot of crooked unscrupulous shit going on in the financial sector! Uber is a legit "unicorn," but $120 billion dollars??? This is the dot com bubble all over again. I know this isn't technically illegal, but it should be.

crispytx 8y ago

This man speaks the truth right here!