Motley Fool Money Uber's Slowdown and Disney's Net Fix
Aug 9, 2019
Bill Mann, Director of Small-Cap Investing at The Motley Fool, shares his expertise on international investment opportunities and unique markets like the Faroe Islands and Malaysia. The discussion touches on Uber's staggering $5 billion loss and its implications for the ride-sharing industry, as well as Kraft Heinz's financial woes. Mann also highlights a creative approach to corporate ethics involving a lively cheer and offers tips for enhancing investment research skills, inspiring a diverse view on global investing.
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Uber's Fundamental Problem
- Uber's revenue growth is slowing while its losses are growing, exceeding $5 billion, partly due to IPO share-based compensation.
- Even excluding that, Uber lost over $1 billion, signaling a fundamental business model problem rather than just high growth expenses.
Uber vs. Amazon
- Unlike Amazon, which generates positive cash flow despite high expenses, Uber burns over $1 billion per quarter.
- Achieving profitability for Uber would likely require sacrificing growth entirely.
Lyft's Streamlined Business
- Lyft, unlike Uber, focuses on ride-sharing without diversifying into other businesses like food delivery.
- Both companies offer bikes and scooters, with Uber recently launching scooters near their offices.