ENTREPRENEURSHIP AND INNOVATION ONLINE COURSE

Market Euphoria Gives Uber a (Lyft)

by Francisco Santolo
January 2020

Uber's promises and the market euphoria surrounding the company are misguiding investors and their analysis. There is nothing in the last official reports that will change my mind on the future of the company.

Without the intention of presenting a complete analysis, I share official information and highlight some facts I consider relevant for you to form your own opinion:

Souces. Official reports:

4Q and 2019: https://ubr.to/2SIKOZr

Supporting material: https://bit.ly/38th7Cj

Call transcript: https://bit.ly/2HqQCSm

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-Market Cap is $ 65.844 B today, after strong appreciation following 4Q call.

-Uber raised over 34B since 2007 (2x1 in 13 years)

2019

Net income: - $ 8.506 B

-Net cash from financing activities (majority from IPO): + $8.939 

-Cash flow from operating activities (beware): 2018 -$1.541B | 2019 -$4.321B (almost x3)

-Cash: $ 10.873 B. Current assets - Current liabilities = +8.286 B.

-Poor growth and low margins in main units.  How does it justify so much future value?

4Q

Net income: -$ 1.096B or 0.64 EPS, against 0.65 expected.

-Forecast anticipating profitability to Q4 2020 instead of full year 2021.  -

-High-priority markets: Argentina, Germany, Italy, Japan, South Korea, and Spain.  With an expected devaluation, its illegal status in Argentina, the growth of Coronavirus and its impact on main markets, and having left Barcelona, how are we still giving so much credibility to their promises?

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