IB Net Payout Yields Model

Uber Plans $90 Billion IPO

If Uber (UBER) can't cut their EBITDA loss as projected, the IPO will bomb. Even so, a $500 million EBITDA loss is a substantial amount for a $90 billion valuation.

-The company forecasted doubling its 2017 net revenue to $14.2B by this year and that its loss before interest, taxes and non-cash items would fall to $500M from last year's $1.7B.

Regardless of the bottom line projections, Uber would trade at about 6.3x sales estimates. The company will face massive competition from Lyft (LYFT) and Waymo (GOOG) that has already started a robotaxi service in the Phoenix area. 

Don't chase this IPO. The public market hates money losing operations unlike the private markets. Uber better have a real plan for substantial profits in 2020 or the $90 billion valuation won't hold.

Disclosure: No position mentioned. Please review the disclaimer page for more details. 


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