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Will Uber’s IPO lead to uber losses for investors?

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Will Uber’s IPO lead to uber losses for investors?

Uber’s upcoming IPO promises to be monumental. The big question for would-be buyers is: will this loss-making juggernaut be a good investment?  Or, like its rival, Lyft, will its shares plummet after the float?

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Roger is the Founder and Chief Investment Officer of Montgomery Investment Management. Roger brings more than two decades of investment and financial market experience, knowledge and relationships to bear in his role as Chief Investment Officer. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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2 Comments

  1. Furthermore, the TV program alluded to the high fees being paid by restaurants to be on the platform (as high as 30% in some cases) and not everyone was happy because they were essentially, risking being forced out of business by not being on the platform and then when they were on it, being charged an exorbitant amount on each delivery that they essentially, made almost nothing because their already slim profit margins were being eroded.

    If my favourite restaurant (or an unknown) isn’t on the platform, then what do I do ? It’s not real (or representative of) choice of the market, regardless of quality. It’s dictating choice to you.

    Also, there was also the option to pay more and appear higher up in the listing of choices to be searched, and naturally, this was unpopular too because it then becomes a case of ‘who can bid the highest at the expense of anyone else’, who has the deepest pockets in the war of attrition and in the end, the customer suffers.

  2. Roger,

    BBC TV as Panorama did a show on the general UK “takeaway delivery” industry and in a similar vein, the only way that these companies could feasibly work was by subverting planning laws by having so called “dark kitchens” based in shipping containers, underneath flyovers and under the noses of local residents who didn’t even know they were there or what they were. Adherence to food safety legislation was also VERY questionable.

    This is another business risk to consider when they say they are a technology company, but are ruled as a food delivery company and ALL of the HAACP requirements with that.

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