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I always look for a discussion of "how much money does Uber need to make to cover all the fundraising" and I never see anyone doing that analysis. Instead it's

by habosa 7y ago

I always look for a discussion of "how much money does Uber need to make to cover all the fundraising" and I never see anyone doing that analysis. Instead it's just "they're not profitable" or "they turned a profit". Uber took a few billion dollars of investor capital over the last decade. Let's assume we live in the world from the textbooks where the value of Ubers stock is actually the net present value of all its future earnings (hah!). What do those earnings need to look like for the investors to turn out to be right? As in, would they have done better investing in some other asset? My theory for why you never see this kind of analysis is that it doesn't matter to anyone. Nobody is trying to actually build a business that will generate money with their investment. They're building hype machines they can use to sell their stake to someone else before it all explodes. It's speculation and manipulation all the way down.

cactus2093 7y ago
Part of the misunderstanding, at least as I understand it, is that for a growing company the vast majority of the expected earnings come a very long time in the future. Peter Thiel talks about this for Paypal in Zero to One, IIRC in 2001 their projections showed that like 75% or more of the net present value would come in 2011 and beyond. I don't actually know how you make a model like that, clearly you need to assume a maximum size and a decline at some point in the future or else you would expect infinite future revenue? But obviously people are doing that, amonth other types of models for Uber and deciding it's still worth $45 Billion as of today. If not the stock price wouldn't be that high. I think the reason you don't see it is just that it's more advanced than what a regular journalist is going to do, and I assume you're not paying for the right specialist publications to have access to that level of reports. If you still think it's completely crazy, then what are you waiting for get out there and short the stock, there's free money to be made!

by habosa 7y ago

cactus2093 7y ago

Part of the misunderstanding, at least as I understand it, is that for a growing company the vast majority of the expected earnings come a very long time in the future. Peter Thiel talks about this for Paypal in Zero to One, IIRC in 2001 their projections showed that like 75% or more of the net present value would come in 2011 and beyond. I don't actually know how you make a model like that, clearly you need to assume a maximum size and a decline at some point in the future or else you would expect infinite future revenue? But obviously people are doing that, amonth other types of models for Uber and deciding it's still worth $45 Billion as of today. If not the stock price wouldn't be that high. I think the reason you don't see it is just that it's more advanced than what a regular journalist is going to do, and I assume you're not paying for the right specialist publications to have access to that level of reports. If you still think it's completely crazy, then what are you waiting for get out there and short the stock, there's free money to be made!