Uber stock facing crisis

Posted by langegroup on November 6th, 2019

Uber CEO Dara Khosrowshahi’s approach to Wall Street, and his lack of communication is taking its toll on the company reports suggest. Uber saw the company’s share price crash almost 9% on Tuesdays trading after the company announced their mixed third quarter results. Since the companies May IPO the stock has seen a 38% plunge in value. The huge fall in share price didn’t completely shock Wall Street’s analysts, as it was to be expected.

Some key figures that stood out to investors:

• Adjusted net revenue: .5 billion vs. .39 billion expected
• Adjusted EBITDA loss: 5 million vs. 5.1 million expected
• Gross bookings: .47 billion vs. .7 billion expected
• Ride-share bookings: .55 billion vs. .51 billion expected
• Monthly active platform consumers: 103 million vs. 107 million expected

Khosrowshahi was able to finally address investors’ concerns over profitability and outlined the company’s plans to create a sustainable and profitable future in their earnings call. With the new plan announced, the company has said they expect to be profitable on an adjusted basis by the end of the financial year 2021. If the company had addressed this concern in the last quarter, the market and investors would have most probably embraced the long awaited details on profits.

Wall Street believes that Khosrowshahi and his team could do a much better job of addressing Wall Street during the company’s phases of growth and loss. The fact that it has taken this long for Khosrowshahi and Uber to offer insights into the company’s bottom line guidance, shows that Khosrowshahi has a lack of understanding on what investors and the market needs to hear from the company.

Simon Gross – Lange group
info@langegroup.com