Uber is getting ready for an IPO. Here’s what this means, and what you should know about investing – enjoy! Add me on Instagram: GPStephan
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DISCLOSURE: This video is purely my opinion. Any amount of speculation is for entertainment purposes ONLY, and this is not to be considered financial advice. I have no monetary gain from the performance of Uber stock.
Uber is one of the largest, if not THE largest ride-sharing company in the world with 91 MILLION monthly users. They also expect to IPO and become a publicly traded company with nearly a $100 BILLION dollar valuation.
However…when you go into the financials, that’s where things start getting a little shaky…because they LOST $1.8 Billion dollars in 2018. In addition to that, they’ve handled ongoing lawsuits….fighting regulation every step of the way…AND they warn that they may NEVER achieve profitability…so from my perspective, I’m not seeing how this IPO would make a good investment.
Just look at the past performance of some previous IPO’s…the average return for IPO’s from 2012-2015 was just 7%. Meanwhile, the SP500 was 60%. Think about that for a second…the overall stock market performed nearly 10x BETTER than tech IPO’s during that timeframe…and lets be real, picking a winning IPO is going to be like picking a needle in a haystack.
So if you’re interested in investing in Uber, here is my take on it:
First of all, NEVER buy on hype. Hype just means the price is artificially inflated through investor exuberance and enthusiasm, and this doesn’t reflect the TRUE value of a company.
Now If you believe OBJECTIVELY that this is a good LONG TERM BUSINESS, and you believe they’re an undervalued company with more room to expand – than by all means, invest in it. But understand that MOST investors are emotional, looking for quick profit, and that will effect the price of the stock that YOU pay, especially around the time of IPO.
However, just to be fair…on the GOOD side of things, I do believe Uber can learn from Lyft’s mistake, and I do think that them filing for an IPO afterwards wasn’t by random chance. I think they’re large enough where everything they do is VERY strategic, and them waiting to IPO could give them some advantage over Lyft. Especially because they can adjust their market valuation to reflect a more reasonable price.
But for myself, I consider:
How will they achieve profitability as a company?
Once we see self driving cars, will we even NEED an Uber anymore?
If so, how will their business adapt?
What’s to stop Tesla from making Self Driving cars and taking over entirely?
And how can Uber continue to expand?
To me, there are too many questions to consider this a viable investment without seeing how things develop.
All I’m saying is this: be careful out there, analyze what you’re doing, don’t get caught in hype, and be smart.
And one more time…this is not financial advice, for entertainment purposes only, and I have no idea what I’m talking about. Resources:
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com
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