Item — HN Reader

I guess if they don't find out how to turn a profit in time, this will probably end in tears for the investors.

In alight with the disappointing Q2 even after Q1 due to their IPO cost, soon the most hyped IPO of the year is now turning into a nightmare for everyone else.

It sounds like the IPO party was over before it had even started.

1 comments

All the investors are already counting their winnings. They've been out for months, years. Seems like they are now just burning through a billion a month in stock option compensation before it all comes crashing down.

It's bizarre to see such a blatant scam being run out in the open. People used to have shame.

Maybe because it’s not a scam and just not a profitable business venture?

Perhaps. But I think there's a genuine question about whether it was ever reasonable to believe that Uber was going to become a profitable company. Most of the claims I read/heard that there was a legitimate path to profitability amounted to "something something on a long enough timeline something something." We may well never find out if those claims are true. After Uber is dead I'm sure there will be many wishful retrospectives full of counterfactual arguments about "if only Uber had done such and such instead," but we'll never know if those are true, either.

I'm not sure why Uber wouldn't be successful. After all, taxis were a profitable enterprise for millennia.

Uber faces lower costs, and they have scale which allows them to have better targeted offers, surges, and advertising.

I noticed that they spent $3B in R&D last quarter. Presumably a lot of that is going into driverless vehicles. Exclude half of that cost, and exclude their one time IPO related costs, and they're profitable.