In this post, I will list out my opinions on why I think Uber is a great investment, and why you should buy the stock as it gets beaten down.
Uber initially wanted to IPO around $120B, but ended up at $75B. Even after this devaluation its IPO was considered a flop. As of this moment, Uber is valued around 56B.
You can imagine how unhappy late stage private investors of Uber were... (Softbank, look at you). But, for the average person who cannot invest in private companies, this is a great opportunity to scoop up shares while the company has taken such a big hit in valuation.
Here are some reasons, why I think Uber is a great long term investment:
1) Stickiness in primary business and huge bets on side businesses - Uber Freight , Uber eats, Uber Works - AWS was one of Amazon's side bets, and now its profit puppy. I wouldnt be surprised if Uber's profit puppy is NOT is core ride sharing business, but something else
2) Uber Eats is dominating SF and growing rapidly , and will eventually dominate the food delivery space. Uber eats itself was valued as a $10B business, which is twice the valuation of Grubhub.
3) Uber eats has 1.44M ratings (avg 4.8) on the app store which is more than the uber app itself! - Customer loyalty is a great, long term moat.
4) Uber's strong network of drivers itself is a great sustainable advantage that gives it a leg up against Lyft. Uber has spent years building and solidifying this network. That is invaluable intangible asset that cannot be ignored.
5) Uber recently announced an experiment for a new source of revenue. It is selling its software as a service to public transit; the first trial is with Marin County public transit. This provides Uber with an constant reliable subscription revenue, versus its core transactional revenue model. #sidebets