Motley Fool Money Uber Goes Public
May 10, 2019
Scott Galloway, a prominent NYU Stern professor and author, dives deep into the implications of Uber's IPO, discussing why investors might think twice before jumping in. He argues for breaking up big tech to enhance accountability and competition. The conversation also touches on Disney's impressive growth amid a shifting media landscape and the challenges of the ride-sharing business, especially the stark contrast between profits and driver pay. Galloway's insights make a compelling case for rethinking strategies in today's tech world.
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Uber's IPO Pricing
- Uber's IPO was priced conservatively at $45 per share, the low end of the range, due to market conditions and Lyft's disappointing performance.
- Despite being oversubscribed, the stock opened lower, reflecting market weakness and investor fatigue with pre-profitability companies.
Path to Profitability Concerns
- Investors are becoming wary of companies with no clear path to profitability, especially in a volatile market.
- Uber's declining take rate raises concerns about its long-term profitability, even with a large user base.
Patience with Ride-Sharing
- Be patient with ride-sharing companies like Uber and Lyft, as their economics are likely to change significantly.
- The rising costs associated with drivers and the distinction between contractors and employees will affect profitability.
