The Strategist

Uber is losing record amount of money


05/31/2019 - 11:56



Losses of Uber in the I quarter have amounted to $ 1 billion.



shopblocks via flickr
shopblocks via flickr
Recently, Uber became a public company, and everyone was looking forward to its first official financial report. There was nothing for shareholders to rejoice: losses have not been reduced, but, on the contrary, reached records.

Despite revenue growth of 20%, the loss of $ 1.034 billion exceeded last year’s loss of $ 478 million.

The company's shares are already traded more than 10% cheaper than at the time of placement within the IPO. Nevertheless, the company itself says that it feels confidence of investors that Uber will become a profitable company.

It is difficult to say why some investors believe in this development model, but it is certain that many professionals do not see Uber as an opportunity for profit with the current management and development model.

Lyft, its competitor, doesn’t have it either. By the way, investors who bought Lyft shares at an IPO also lost a lot of money on these investments.

It should be added that strengthening regulation in a number of countries and the struggle for the salaries of their drivers also play against Uber.

The market reaction was mixed. First, the stock went up, but then dropped to the lows of the trading session. 

source: bloomberg.com