Company that loses money hand-over-fist with no viable pathway to profitability other than "automation" and "monopoly" acquires other company that loses money hand-over-fist in an effort to. . ....
Company that loses money hand-over-fist with no viable pathway to profitability other than "automation" and "monopoly" acquires other company that loses money hand-over-fist in an effort to. . . what exactly?
I get that the markets are happy about this because they think once the platform battle is over and the dust settles the winner can use their monopoly power to actually turn a profit. But the market is dumb. Any price level that's actually cash flow positive is going to price most of the user-base out of actually using these services. There is no way this business model survives without subsidies.
This has mostly been received positively by the markets. Uber stock is up 6% in the wake of things. The postmates acquisition can help bolster Uber Eat's percentage loss of revenue, and in general...
This has mostly been received positively by the markets. Uber stock is up 6% in the wake of things. The postmates acquisition can help bolster Uber Eat's percentage loss of revenue, and in general helps their revenue numbers for the quarter given the certain decline of rideshare this quarter.
The fact that it was all stock is big for Uber, too. This doesn't cut into their cashflow, which is big in the age of Covid19. In fact, it can help their free cash numbers.
Company that loses money hand-over-fist with no viable pathway to profitability other than "automation" and "monopoly" acquires other company that loses money hand-over-fist in an effort to. . . what exactly?
I get that the markets are happy about this because they think once the platform battle is over and the dust settles the winner can use their monopoly power to actually turn a profit. But the market is dumb. Any price level that's actually cash flow positive is going to price most of the user-base out of actually using these services. There is no way this business model survives without subsidies.
relevant Matt Levine post
This has mostly been received positively by the markets. Uber stock is up 6% in the wake of things. The postmates acquisition can help bolster Uber Eat's percentage loss of revenue, and in general helps their revenue numbers for the quarter given the certain decline of rideshare this quarter.
The fact that it was all stock is big for Uber, too. This doesn't cut into their cashflow, which is big in the age of Covid19. In fact, it can help their free cash numbers.