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It’s getting straight up embarrassing for Uber CEO Dara Khosrowshahi. And if he doesn’t soften up his approach with Wall Street and communicate better to that influential cohort — as rival Lyft has done in recent quarters — it could be investors that incur further pain in a stock that has gone in the toilet since an overhyped IPO back in May.
Uber’s stock (UBER) crashed close to 9% on Tuesday following the ride-hailing giant’s decidedly mixed third quarter. The stock has plunged 38% from Uber’s May 10 IPO price. While it was borderline refreshing (we are searching for straws here...) that Uber’s massive loss per share didn’t completely whiff Wall Street forecasts, it was hard to overlook the inherent ugliness of the quarter.
Some things that stood out:
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Adjusted net revenue: $3.5 billion vs. $3.39 billion expected
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Adjusted EBITDA loss: $585 million vs. $805.1 million expected
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Gross bookings: $16.47 billion vs. $16.7 billion expected
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Ride-share bookings: $12.55 billion vs. $12.51 billion expected
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Monthly active platform consumers: 103 million vs. 107 million expected
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Business lines: Uber Eats, Uber Freight and other bets continue to bleed red ink. The core Uber Rides business saw adjusted EBITDA rise 52% to $631 million.
“Investors have a lot of questions around profitability,” Wedbush analyst Ygal Arounian said on Yahoo Finance’s The First Trade.
Khosrowshahi did his best impression (finally) of Lyft’s CEO Logan Green and outlined a path to profitability on the earnings call. The company expects to be profitable on an adjusted EBITDA basis in the full fiscal year 2021. If Uber would have did this months ago, the market would have probably embraced the long-awaited details on profits.
Arounian says Khosrowshahi and his team could do a better job holding the hands of Wall Street during this phase of growth and losses. The fact Uber only now offered more insightful bottom line guidance underscores Khosrowshahi’s lack of understanding on what investors need to hear from him.
This time around the market ignored the profit guidance, underscoring the growing lack of confidence in Uber’s management and sent the stock further into crisis mode. How else could one view the situation at Uber? You have a highly public CEO in Khosrowshahi telling the masses that profits are possible soon — an attempt to address one of the biggest mysteries in the tech space right now — and yet the stock is dumped.
Come on.
What else analysts are worried about on Uber
Besides Mr. Market tuning out Khosrowshahi’s promises, Wall Street remains concerned on several aspects of Uber based on Yahoo Finance’s conversations.