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Uber Joins the S&P 500
- granzymes 3y agoIt's been a recurring topic of conversation whether Uber would ever reach this milestone. The S&P 500 requires members of the index to be profitable in the latest quarter and over the past year, which Uber achieved for the first time in Q3. Uber reported net income of $221 million on $9.29 billion in revenue in the third quarter, and in the past four quarters altogether it generated over $1 billion in profit.
- onlyrealcuzzo 3y agoInteresting what GAAP allow one to call profits: https://www.nasdaq.com/articles/uber-may-achieve-profitability-despite-the-clickbait-headlines https://www.nasdaq.com/articles/uber-may-achieve-profitabili...
- candiddevmike 3y ago> It took a $756 million pre-tax (non-cash) net benefit of unrealized gains related to reevaluating its equity investments. It means their stake in other companies had seen an appreciation in value, which the Company didn't sell or take profits as in unrealized gains and doesn't account for taxes as in pre-tax. > The Company gained nothing and remains a bagholder in its equity investments, including DiDi, Aurora, Grab Holdings Inc. (NASDAQ: GRAB), and Zomato stakes. Uber is turning into a financial company like other transportation giants (Delta, AA). Maybe for the best, as I think everyone understands that self driving Uber is a pipedream.
- paul7986 3y agoIndeed though Waymo hasn't had any big accidents unless they are keeping them on the down low and or paying lots to the right people.
- candiddevmike 3y agoWaymo isn't Uber. And I doubt Uber will evere be/acquire Waymo...
- rsaesha 3y agoWhat is specifically stopping Uber from providing an autonomous driver service so hard to warrant being classified as a pipedream event?
- kevinventullo 3y agoNot OP, but Uber recently announced a partnership with Wayno: https://investor.uber.com/news-events/news/press-release-details/2023/Waymo-and-Uber-Partner-to-Bring-Waymos-Autonomous-Driving-Technology-to-the-Uber-Platform/default.aspx https://investor.uber.com/news-events/news/press-release-det... Not a nail in the coffin, but it doesn’t exactly spark confidence in their own efforts.
- fyrn_ 3y agoSelling off their self driving division in 2020 is probably the more telling sign for their own efforts
- cloudwalking 3y agoUber sold its autonomous division to Aurora in 2020 https://www.reuters.com/article/us-uber-atg-idUSKBN28H2RX/ https://www.reuters.com/article/us-uber-atg-idUSKBN28H2RX/ Uber's self-driving dreams rest on a partnership with Waymo (and whoever else eventually produces a safe autonomous vehicle).
- wubrr 3y agoIf they made self driving with the same quality as they made their apps, they'd get shut down pretty fast.
- granzymes 3y agoUber would have met the inclusion criteria for the S&P500 regardless of the increase in unrealized equity gains it reported last year in Q4. Notably, this quarters $221 million in profit was not driven by unrealized gains.
- viscanti 3y agoAfter hearing for years how Uber is a scam and will never be profitable, I guess it makes sense there's some moving of the goalposts here.
- wubrr 3y agoubereats is actually kind of a scam though. They lie about some of their promotions, they lie about their delivery times and 'latest delivery by' times, they lie about 'uber cash credit', and they lie about refunds. I've noticed this stuff occasionally over the years, and started collecting the evidence recently... it happens a lot more often than you'd think.
- atom_arranger 3y agoThey calculate tips after fees and before discounts, so customers are tricked into tipping more. First noticed this after getting a buy one get one free deal and seeing a tip calculated at 2X what I'd expect
- wubrr 3y agoYup, they will shower you with 'promo' offers like '2 for 1' (where the price is typically just doubled for a single item anyway), then try to charge you like a 36% tip. They also straight up steal many of the tips from their delivery people as evidenced my many such threads/concerns online. https://www.reddit.com/r/uberdrivers/comments/xyk7cx/uber_stealing_tips/ https://www.reddit.com/r/uberdrivers/comments/xyk7cx/uber_st... In general, never tip on ubereats.
- RobAtticus 3y ago
- JumpCrisscross 3y ago> Interesting what GAAP allow one to call profits If you want unfuckable metrics, look at cash flow. Uber's operations are cash-flow positive [1]. [1] https://s23.q4cdn.com/407969754/files/doc_earnings/2023/q3/earnings-result/Uber-Q3-23-Earnings-Press-Release.pdf https://s23.q4cdn.com/407969754/files/doc_earnings/2023/q3/e...
- disgruntledphd2 3y agoCash flow less share compensation tends to work better for tech companies.
- JumpCrisscross 3y ago> Cash flow less share compensation Shares aren’t cash. No need to double count.
- disgruntledphd2 3y agoThey're not free though, there's a cost to providing them. The point (which was made somewhere by Unhedged in the FT (but I am failing at finding the article)) is that cash flow is somewhat deceptive for companies that compensate their employees with cash.
- paulpauper 3y agoand in the past four quarters altogether it generated over $1 billion in profit. Yup...that's why the stock has done so well despite the insistence or chorus by the media since 2010 of how Uber is going to go bankrupt or burning cash. It's like Tesla in this regard--years of losses on capital expenditures--followed by huge and sudden profit as the initial capital outlay pays off massively.
- redox99 3y agoI assume joining the SP500 means an almost automatic price jump, since its shares will be purchased by ETFs that track that index?
- apstats 3y agoIf this were surprise news maybe, but this is the type of news that is priced in slowly over time and somewhat expected. Basically when sophisticated people bought uber a year ago one of the drivers of a higher price was the assumption it might be included in the S&P500. A lot of things in finance and markets are self fulfilling prophecies like this, for example just look at the fed. They are the classic example of expectations > action.
- travisjungroth 3y agoThere’s still a jump proportional to how unexpected it was by the market as the bets are settled, so to speak. Until it’s announced, there’s some contingency that thinks it won’t happen and is putting downward pressure on the stock. Eyeballing the small jump here hints that it was a small contingency.
- zzleeper 3y agoI wish there would be a way to just buy sp500 minus a list of firms, so I could invest in a diversified way without going into Uber and friends (or any other firms that make profits on paper without the cash flow to back it)
- AdamJacobMuller 3y agoMost trading APIs are fairly simple, TD for example is very easy to use and very accessible. IBKR is a bit weirder in both protocol and access, but, works very well. You can pretty trivially DIY that.
- neilv 3y agohttps://pebble.finance/ https://pebble.finance/ (Disclosure: The CEO is an acquaintance, but I have no financial interest.)
- mupuff1234 3y agoNot directly related, but just noticed that Google finance added a "effective tax rate" row in the "financials" section. Apparently Uber had an effective tax rate of -22%(?) in the last quarter. No idea if it's a mistake or not.
- onlyrealcuzzo 3y agoHow is this possible? Does that mean the government is giving them 22% of their revenue? How and why?
- mupuff1234 3y agoNot sure, maybe it means that they have carry over losses that they can use to deduct taxes from future profits - but that's just a guess.
- Solvency 3y agoShadier things have happened in corporate oligarchies.
- rmm 3y agoCarry forward losses of previous years.
- solarkraft 3y agoSubsidies?
- willsmith72 3y agowho got kicked out?
- granzymes 3y agoUber, Jabil, and Builders FirstSource are in. Alaska Air Group, Sealed Air Corp, and SolarEdge are out.
- TheRealPomax 3y agoAnother reminder that the stock market is not about how well a company does, it's about how well its stock can be traded. Uber has never made a profit until just now: it could just as easily collapse tomorrow, but it's a good trading stock.
- shyn3 3y ago[dead]
- smabie 3y agoWhat does this even mean?
- TheRealPomax 3y agoIt means a whole bunch of people are going to see this title, not read the article, and go "looks like Uber is doing great" when reality it's incredibly far from doing great. The only thing "doing well on the stock market" signals is that a company's stock trades well on the stock market. It literally tells you nothing about the company itself.
- smabie 3y agoThen it should be literally trivial to make money off of that mispricing then. Except it's not.
- Tactical45 3y agoUber will continue to grow in profatbility. As the platform matures and continues to grow in revenue, the overhead development cost will actually decline, not just as a percentage but as an absolute number as well. Furthermore, Lyft being borderline bankrupt helps Uber take more advantage of the most profitable and largest market.
- paulpauper 3y agoIt's similar to Tesla in this regard--a decade of losses from 2010-2020 and then -boom--huge cashflow once the infrastructure outlay and customer base acquisition pays off. 'Smart money' was right all along to keep buying the dips. Uber is a play on not only on transportation, but also Ai, logistics, delivery, etc. It's like Amazon in this regard.
- ganeshkrishnan 3y agoUber is just an app. Many Uber drivers have both Uber and Lyft open at the same time and choose the best one. All it takes is a new app to offer better commissions for drivers and riders. I am not so sure that Uber has a very sticky customer base
- yakkityyak 3y agoI'm also not convinced uber eats will ever make money.
- Sephr 3y agoIt's an app that matches drivers with riders or deliveries. There's not much to 'mature', so I doubt that they will grow much in profitability. I can absolutely see this happening for transit companies like Waymo that are still in the maturation process of developing novel infrastructure.
- Tactical45 3y agoMature in a sense that Uber has invested billions in operations to get deals with cities & airports, developer legal expertise globally, and has technology that allows them to operate globally. Saying Uber is "just an app" isn't a strong argument. It overlooks the marketplace dynamics that in themselves are a huge moat. You can also say "Instagram" is just an app.. But good luck trying to recreate that level of success.
- paulpauper 3y agoThe media from 2009 to 2018: "Uber will go bankrupt; it's losing too much money" and here is Uber a decade later , and the stock keeps going up. Uber is highly cash flow positive on operations, to the tune of $600 million from its most recent earnings report or also comparable to Tesla in 2021, which the experts in the media were certain would be an impossibly. During Covid it initiated to a successful delivery business, Uber Eats. I think this shows how the financial media can be disregarded as a useful source of investment advice or insight. The VCs and other investors who keep investing in uber despite losses were right, as , similar to Amazon, they knew the losses were temporary and to build the outlay/infrastructure of Uber's business.
- V-eHGsd_ 3y ago> I think this shows how the financial media can be disregarded to be fair, the actual financial analysts have been very bullish on uber for a long time. the stock has been overweight or buy for most of its public history, at least by my recollection (I own a chunk of stock so i've been paying some attention). it's on forums like this though, where folks are inserting their desire for uber to fail because they don't like the company or the (former) executives or whatever, that I hear the bankruptcy drum being beaten.
- omot 3y agohttps://news.ycombinator.com/item?id=14936179#14937083 https://news.ycombinator.com/item?id=14936179#14937083
- Kye 3y agoI'm sure at some point I was aware of Uber's IPO, but I have no recollection of it.
- Satam 3y agoOk, so I'm not very educated in the stock market. Could someone help get this straight? Uber raised like 20 billion privately + 8 on their IPO. After 14 years now they have made their first profits - 1 billion in the last 4 quarters. This just doesn't sound good to me?
- 15457345234 3y agoHave you ever been to a casino?