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> Where Wansley and Weinstein break important new ground is on the other legal standard set by the Supreme Court: recoupment of losses. If Uber and WeWork and t
by djoldman 3y ago
> Where Wansley and Weinstein break important new ground is on the other legal standard set by the Supreme Court: recoupment of losses. If Uber and WeWork and the rest of the unicorns are perpetual money losers, it sounds like the standard isn't met. But Wansley and Weinstein point out that it can be — even if the companies never earn a dime and even if everyone who invests in the companies, post-IPO, loses their bets. That's because the venture capitalists who seeded the company do profit from the predatory pricing. They get in, get a hefty return on their investment, and get out before the whole scheme collapses.
That makes sense except that in the case of Uber, the "whole scheme" never collapsed. Uber stock is about where it was when it IPO'd, it has been between ~20 and ~60 since.
It seems awkward at the least to say that Uber's lack of profitability is an ongoing scheme that's going to eventually defraud current owners of Uber stock.