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Uber Hemorrhaged Cash in Q3 2019, just before lockup expires



Beleaguered ride-sharing giant Uber continued to torch cash as a dated Joker reference in Q3 2019, but it claims the news is positive because parts of the business would technically looked profitable if you looked past all the ways to lose money.

In quarterly results released on Monday Uber reported a net loss of approximately $ 1.2 billion – which The Wall Street Journal reported beat many analysts' expectations, but was still the third largest since it began issuing reports in 2017. It is significantly better than the last quarter, where it threw $ 5.2 billion into flames, although there is not much improvement when we estimates that one-time quarter payment of $ 3.9 billion for stock compensation.

Uber reported that its core ride-sharing business is now profitable for $ 631

million in revenue of $ 2.9 billion but only when excluding main categories of non-operating expenses such as interest, depreciation and stock-based compensation . The $ 631 million figure, which again only exists in theory, is higher than the Q3 2018 total of $ 416 million.

As Ars Technica noted these are real costs that cannot be discounted and will continue to provide Uber's business. Uber is also being hit by major losses in its Uber Ea ts business which lost $ 316 million, driven largely by expansion costs.

Excluding interest, taxes, depreciation and amortization (EBITDA), Journal wrote, Uber's total loss was $ 585 million. That's worse than the same quarter last year, when it lost $ 458 million. Uber now projects the entire business will be profitable in 2021 on that EBITDA basis, even though all the various arms are facing bad competition and the Associated Press reported CEO Dara Koshrowshahi "gave few details about how different Uber units would change for the company to reach its new profitability target."

The company debuted in its first IPO in May 2019 at $ 45 per share before immediately took heavy losses . Investors do not seem particularly reassured by the recent report with shares again falling (stood at $ 29.37 during the afternoon trading on Monday night).

According to the Journal, Uber is also on the verge of the IPO period "lockup", which expires Wednesday. At that time, major shareholders such as corporate employees and large investors will be free to start dumping shares. Reuters reported that some analysts believe over 80 percent of the company's outstanding shares will be eligible to hit the market. It can speak very bad news for Uber, e friend if only a relatively small number of outstanding shares are dumped .

"For a company where investors are already skeptical, they had to come out with a One Quarter, and instead it was a B-minus," Wedbush Securities analyst Dan Ives told the Washington Post . "This as a precursor to Wednesday's lockup – there are many agita from investors, and this quarter does not calm the fear."

Regulatory backlash has also hit Uber hard with the home state of California recently passed Assembly Bill 5 into law . This Act aims to compel the company to continue to classify taxi and drivers as independent contractors responsible for eating many of the costs, rather than employees, which will destroying Uber and other gambling companies' business models. Uber has argued that it is exempt from the obviously ridiculous argument that is a "platform" rather than a transportation company, and plans to strike back in court and with its own cash-driven referendum run .


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