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An Uber Disappointment

Dear Mr. Berko: Our Morgan Stanley stockbroker will let us get in early on Uber stock, but we’d have to invest a minimum of $250,000. We have the money, but investing that much in one stock makes me nervous. Morgan Stanley says Uber is worth $63 billion, and we must purchase a minimum of 5,100 shares at $48.77 a share. “This could be the chance of a lifetime,” our broker says. Morgan Stanley can’t let us see audited financials, but my husband’s convinced Uber is “gold!” Your opinion? — LS, Oklahoma City

                Dear LS: Anyone investing $250,000 without reading an audited financial statement must be dumber than a three-legged wombat that quacks. “Stupid is as stupid does.” If you’d like to find out how stupid, buy Uber and then, in three months, tell your Morgan man to sell your 5,100 Uber shares. The difference between what you paid for Uber and what it sells for will measure your stupidity.

                Uber’s CEO, Travis Kalanick, recently told the financial media he’s in no hurry to take his fast-growing ride hailing company public. But hundreds of enthusiastic investors who dropped billions into Uber because they were told the company is worth $63 billion are profoundly disappointed. Travis said the initial public offering could be three to five years away. He blithely told CNBC that he doesn’t need public capital markets and prefers the flexibility offered by private funding.

                Translation: Travis is telling the world that Uber’s problems are bigger than he’s willing to admit. He doesn’t want investors to know Uber is hemorrhaging money with the velocity of a gushing water main. And he doesn’t want investors to know that his company’s income statement, balance sheet and cash flow statements may be smoldering in ashes. Travis knows that the Securities and Exchange Commission requires a company filing an IPO to provide full disclosure in the prospectus. Full disclosure might be ruinous. Travis is having too much fun taking millions from ignorant panic-stricken suckers begging for stock and frantic that they may miss the next Apple or Microsoft. Taking money from these patsies is enormously easier than taking money from informed investors via a prospectus. Why bother going public? Well, Uber’s auditors and lawyers, whoever they are — I can’t locate the identities of either — must tacitly agree.

                Travis added a few other puerile reasons for delaying an IPO that must have made good sense to him. However, I remember participating in a Texas cattle roundup 60 years ago and hearing the tallyman tell a wrangler that “the best time to brand a steer is when the iron is hot.” And there are numerous investors (stupids) who think Uber is hot. Considering today’s market, they believe that Uber could take off like a Titan rocket. However, there’s a possibility that Uber’s real value is no more than that of a bucket of night soil, and a public offering could create a Bernie Madoff-like scandal. Be mindful that you’re not allowed to see an audited report. This may be the reason that Travis needs three to five years plus lots of voodoo to get his numbers ready, his taxis clean and his drivers in line and licensed.

                Therefore, for your information, I would like to ask some questions: What were Uber’s 2015 and 2014 revenues? What were Uber’s profits in those years? What were Uber’s losses in those years? What does Uber’s balance sheet (assets and liabilities) look like? Finally, how can anyone imagine that a secretive Uber — which has never earned a dime, has lost billions and may never earn a profit — is worth $63 billion? The answer must be those psychedelic and hallucinatory drugs. Fidelity, Putnam, T. Rowe Price, Tiger Global Management, Vanguard, The Hartford and other mutual funds stupidly wrote checks and invested heavily in this unicorn. Now some of these big names are getting nervous, and I’d not be surprised if Fidelity marked down its $1.4 billion Uber investment and others did the same.

                Buy 5,100 shares of Uber only if Morgan Stanley will guarantee against loss. Some brokers do that for good clients.

                Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at mjberko@yahoo.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

COPYRIGHT 2016 CREATORS.COM

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Drew Limsky

Drew Limsky

Editor-in-Chief

BIOGRAPHY

Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.