Dara Khosrowshahi, CEO of Uber, speaking at WEF 2019 in Davos, Switzerland on January 23, 2019.
Adam Galica | CNBC
Leading its debut in the public market, Uber expects investors to align the shares with Amazon's rather than its next competitor, Lyft. Uber plans to compare to Amazon during its pre-IPO roadshow to justify the billions of dollars it continues to lose, according to the New York Times.
No wonder Uber would choose Amazon as the model, judging by the action's performance. Amazon's stock price multiplied from $ 18 a share in its 1997 debut to nearly $ 2,000. Lyft's, on the other hand, fell from its initial price of $ 72 in March to just over $ 57. Uber did not immediately respond to a request to comment on its roadshow.
Amazon's success in the public market, despite losing money for much of its existence, is a favorite comparison for other companies that debuted without profits. But Amazon is the exception, not the rule.
Amazon's IPO serves as a useful benchmark for Uber, which posted an adjusted EBITDA loss of $ 1.85 billion in 2018, coupled with slow revenue growth. He also reported a loss of $ 1 billion in the first quarter of 2019 in his S-1 filing last week. Amazon also debuted without even making a profit, saying it plans to invest in building its business in new areas, as Uber also said.
Like Amazon, Uber prides itself on diversifying beyond the main service by which it is known. While Lyft narrowed its focus on carpooling and personal mobility, such as electric scooters, Uber expanded to food delivery, freight and even flying cars.
But for Amazon, profitability was driven largely by Amazon Web Services, which accounted for 13 percent of Amazon's total sales and 50 percent of its total operating revenue in the first quarter of 2019. It is still unclear whether Uber has the same kind of business getaway that can lead to profits. It's unlikely that Uber's other bets will add as much value as AWS has to Amazon, said Paul Meeks, portfolio manager at Wireless Fund, to CNBC.
"They will try to leverage their platform on other things, but the other things will be transportation, because that's their job and the transportation industry has many established participants," Meeks said.
After Uber settled $ 44 to $ 50, its valuation fell from $ 100 billion to a range of $ 80.53 billion to $ 91.51 billion on a fully diluted basis. But even with the lower valuation, Amazon's Uber comparison boosts the "fear of losing."
"This is a huge fear," Dan Ives, an analyst with Wedbush Securities, told CNBC. "This was a seminal event in terms of investing in technology stocks over the last 20 years."
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