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Could someone w/ an understanding of accounting add to this report? Uber is "offloading" bike/scooter business to Lime, but also making an investment in Lime...
by xiaolingxiao 6y ago
Could someone w/ an understanding of accounting add to this report? Uber is "offloading" bike/scooter business to Lime, but also making an investment in Lime... is this just a way to hide losses? Essentially paying Lime to take the red off Uber's balance sheet, while maintaining an option in the micromobility market?
- rossdavidh 6y agoIANAAccountant, but I think the investment was in the past, and this announcement is that they are ditching the investment. But I could be reading that wrong.
- blackswan101 6y agohttps://www.bloomberg.com/news/articles/2020-05-07/uber-leads-170-million-investment-into-lime-electric-scooters https://www.bloomberg.com/news/articles/2020-05-07/uber-lead...
- Jommi 6y agoThey are refocusing on what's their core business. They found out that they're too late to the scooter game and just thought best to be a platform where other providers compete
- mxschumacher 6y agoThey are swapping equity. Uber exchanges its ownership of jump against shares of lime. It's a common operation and uber has done it many times. It's not directly tied to losses, because the value of the transaction is based on the operational performance of both businesses. It's not shady.
- lmm 6y agoIt doesn't offload their losses. It offloads their risk, since the Lime investment can't go below zero, but that's genuine and not just accounting (if Lime goes bankrupt, Uber is not on the hook for it). Buying and selling in stock is normal and legitimate, particularly in times like these where a valuation of Jump in terms of Lime shares is probably a lot more stable than a valuation of Jump in terms of cash.