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The whole beginning of the article is based on the assumption that Uber's story is played out. I don't think we can call that one yet, IMHO the market hasn't di

The whole beginning of the article is based on the assumption that Uber's story is played out. I don't think we can call that one yet, IMHO the market hasn't discovered what is Uber WORTH just yet.

deleted 7y ago
[deleted]
onlyrealcuzzo 7y ago
When does the market discover what something is worth? I only know of two main lines of thinking: 1) that the market is more or less a random walk, and prices are approximately random. 2) that the market is efficient and the price at all times accurately reflects all available information. So Uber is either priced accurately (forever) or randomly (forever). I'm not familiar with a third line of thinking that it's random for a period of time and then accurate. Or approximate for a period of time and then accurate.
- tmh79 7y ago
  The idea is that ridesharing is still early on in the monetization/profitability/growth curve. Right now, its possible to value online advertising companies (google, fb, linkedin before acquisition etc) based on some multiples of revenue and growth. What those multiples are fairly well agreed upon and relatively static. The argument above is that the multiples are not well defined in the rideshare sector, and its hard to find a stable valuation for these companies based on that. As uber and lyft turn profitable-ish in the next 6 - 8 quarters and focus on revenue growth as opposed to purely gross bookings growth as well as stemming losses, the multiples these companies are valued on are going to change a lot.
- azylman 7y ago
  The third line of thinking is a combination of the two: "In the short term, the market is a voting machine. In the long term, the market is a weighing machine". This is a popular quote from Benjamin Graham (https://en.wikipedia.org/wiki/Benjamin_Graham https://en.wikipedia.org/wiki/Benjamin_Graham), who taught Warren Buffett. It's basically the whole principle behind value investing.
jpalomaki 7y ago
Looking at just ride sharing is too narrow. Some companies are already talking about ”mobility as a service”. I need to get from A to B. The best way can be a combination of transport methods. Like sometimes it would make more sense to start with electric scooter, then jump to Uber. Or maybe take Uber, then train and Uber again. Or train one way, car share vehicle back. I assume in future I will have an app that handles all this, without me making the separate bookings or checking time tables. I’d likely pay extra for the convenience of doing everything through one company. Or maybe their monthly subscription plan is just too attractive.
rossdavidh 7y ago
I was thinking something similar, and it occurred to me, "what if the actual long-term value of Uber is less than $0?" If it's true that Softbank is still underwater on their Uber investment, then they have a big problem. If Uber (or a company like it) were trying to IPO in a post-WeWork environment, they would do considerably worse than they did, I think.

The whole beginning of the article is based on the assumption that Uber's story is played out. I don't think we can call that one yet, IMHO the market hasn't discovered what is Uber WORTH just yet.

deleted 7y ago

[deleted]

onlyrealcuzzo 7y ago

When does the market discover what something is worth? I only know of two main lines of thinking: 1) that the market is more or less a random walk, and prices are approximately random. 2) that the market is efficient and the price at all times accurately reflects all available information. So Uber is either priced accurately (forever) or randomly (forever). I'm not familiar with a third line of thinking that it's random for a period of time and then accurate. Or approximate for a period of time and then accurate.

tmh79 7y ago
The idea is that ridesharing is still early on in the monetization/profitability/growth curve. Right now, its possible to value online advertising companies (google, fb, linkedin before acquisition etc) based on some multiples of revenue and growth. What those multiples are fairly well agreed upon and relatively static. The argument above is that the multiples are not well defined in the rideshare sector, and its hard to find a stable valuation for these companies based on that. As uber and lyft turn profitable-ish in the next 6 - 8 quarters and focus on revenue growth as opposed to purely gross bookings growth as well as stemming losses, the multiples these companies are valued on are going to change a lot.
azylman 7y ago
The third line of thinking is a combination of the two: "In the short term, the market is a voting machine. In the long term, the market is a weighing machine". This is a popular quote from Benjamin Graham (https://en.wikipedia.org/wiki/Benjamin_Graham https://en.wikipedia.org/wiki/Benjamin_Graham), who taught Warren Buffett. It's basically the whole principle behind value investing.

jpalomaki 7y ago

Looking at just ride sharing is too narrow. Some companies are already talking about ”mobility as a service”. I need to get from A to B. The best way can be a combination of transport methods. Like sometimes it would make more sense to start with electric scooter, then jump to Uber. Or maybe take Uber, then train and Uber again. Or train one way, car share vehicle back. I assume in future I will have an app that handles all this, without me making the separate bookings or checking time tables. I’d likely pay extra for the convenience of doing everything through one company. Or maybe their monthly subscription plan is just too attractive.

rossdavidh 7y ago

I was thinking something similar, and it occurred to me, "what if the actual long-term value of Uber is less than $0?" If it's true that Softbank is still underwater on their Uber investment, then they have a big problem. If Uber (or a company like it) were trying to IPO in a post-WeWork environment, they would do considerably worse than they did, I think.