was a transformational year for Uber and I’m gratified by our progress, steadily delivering against the commitments we’ve made to our shareholders on our path to profitability.
We recognize that the era of growth at all costs is over . In a world where investors value demand not just growth, but profitable growth, we are well-positioned to win through continuous innovation, excellent execution, and the unrivaled scale of our global platform.
Khosrowshahi’s remarks sound optimistic. But the executive is just telling the market what it wants to hear. While Uber’s top line performed well in the fourth quarter, the company’s bottom line is still a disaster.
Uber lost $ 1.1 billion in the fourth quarter, which is a (% jump from the previous year period loss of $ million . Full-year losses come out to a staggering $ 8.5 billion.
With only $ 70 .5 billion in cash on the balance sheet going into , Uber’s management will be hard-pressed to continue sustaining these gigantic losses. Investors can expect severe dilution going forward.
Uber’s management hopes that by dangling “EBITDA profitability” projections to investors, they can distract the market from the company’s sizable and unsustainable net income losses.
Investors Shouldn’t Take the Bait
Investors shouldn’t take Uber’s claims seriously. Management is pumping Uber’s stock price by telling the market what it wants to hear. But they have made no meaningful progress towards achieving their goals of profitability.
Don’t forget Uber’s expanding expanding stock-based compensation expense. It was only $ (million in) . but it has now grown to $ 4.6 billion – an insane growth rate of over 2, 889% in a single year.
Could that be the real reason management is trying to boost the stock price?
There is nothing in Uber’s fourth-quarter result that justifies a rally in the stock. Expect shares to give back most of their recent gains.
Disclaimer: This article represents the author’s opinion and should not be considered investment or trading advice from CCN.com.
This article was edited by Josiah Wilmoth