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RIDE OR DIE
Investors found another bright spot in the stock market yesterday after Uber CEO Dara Khosrowshahi announced that the company has enough money to ride out the coronavirus epidemic.
Uber’s core riding business is down 60% to 70%, and it even banned cheaper Uber Pool options. NYC mayor Bill de Blasio clarified that shared ride-hail trips were reserved for families and "real couples." Not surprisingly he was trolled relentlessly on twitter for the gaffe.
But the car-service slowdown doesn’t mean that Uber drivers are being rendered useless. UberEats is still thriving during this quaran-time. In fact, Uber claims it is doing a bang-up job at offsetting the losses due to a lack of riders.
Don’t call it a comeback
Shares of Uber’s stock were at their lowest point ever earlier this week as investors, understandably, viewed the tech play as a travel company. It was a good move by DK to get out in front of investors and assure them that the company’s $10B of unrestricted cash would be enough to get it through the epidemic.
The news sent Uber’s stock surging, closing 38% higher on the day at $20.49. For what it’s worth, things still aren’t “good”... that’s more than 50% below its all-time high of above $47.
Spread the wealth
The ride-sharer went all Reaganomics on the industry, with the good fortune trickling down to its pink-mustached competitor. Lyft’s shares rose 29% on the news, as well, closing at $20.70. Editor's note: Lyft doesn't have a food delivery biz.
And that's where Dara should have STFU.
Uber’s CEO casually dropped this gem during his call with analysts: “We believe we’re already seeing the worst of the impact and the recovery in some places.” Wait, what?
*Checks Dara's LinkedIn to see what medical school he attended*
Dara is going full spin zone and Wall Street appears to be eating it up hook line and sinker. For now. But just weeks into this sh*tstorm, with so many unknowns, Uber could be in a very different liquidity position should additional measures (read: “shelter-in-place”) be taken by Uncle Sam or the coronavirus decides to make itself at home.
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