Uber’s stock (UBER) is stinking up the joint. And what is tantamount to a post IPO crash isn’t lost on one early investor.
“Uber has lost its mojo,” early Uber investor Bradley Tusk of Tusk Ventures said on Yahoo Finance’s The First Trade. Tusk — a longtime confidant of Uber founder and board member Travis Kalanick — confirmed that he continues to be a shareholder in Uber. But depending on how third quarter earnings shake out, he may look to sell some — or all — of his shares once the IPO lockup period expires on Nov. 6.
Tusk says that investors have started to question Uber’s innovation and whether it could be the Amazon of transportation. Losing that belief in Uber is critical at a time when achieving profitability is incredibly unlikely.
Meanwhile, the negative headlines continue to mount for Uber.
This week alone Uber uncorked its second round of layoffs of the year, 435 people in the product and engineering departments. The fresh pink slips come as Uber tries to unlock efficiencies in a business hemorrhaging scary amounts of cash.
California’s assembly passed a bill — Assembly Bill 5 - this week that may require Uber and Lyft to classify its drivers as employees rather than independent contractors. Doing so could materially raise the cost of doing business for ride-sharing giants that are already posting hefty losses.
Uber’s stock is down 27% from where it priced its IPO in early May.
Brian Sozzi is an editor-at-large and co-host of The First Trade at Yahoo Finance. Follow him on Twitter @BrianSozzi
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