Uber: stakes in rival companies no longer make sense

{"text":[[{"start":12.14,"text":"Uber’s investment in Chinese ride-hailing company Didi has outlived its usefulness. "},{"start":17.044,"text":"Didi’s share price may have jumped nearly 50 per cent this month following reports that a Chinese government probe is coming to an end. "},{"start":23.823999999999998,"text":"But Uber is right to continue with plans to sell down its stake. "}],[{"start":28.400000000000002,"text":"In 2016 Uber sold its Chinese operations to Didi in return for an 18.8 per cent stake — a deal valued at about $7bn at the time. "},{"start":37.554,"text":"Swapping lossmaking investments in competitive markets for a stake in dominant local businesses has enabled Uber to keep a foot in overseas countries. "},{"start":45.272000000000006,"text":"Instead of racking up losses in Indian food delivery, for example, it has invested in rival Zomato. "}],[{"start":51.69,"text":"But the investment in Didi has done little to help Uber break even. "},{"start":55.669,"text":"After listing in New York last year, Didi was walloped with a Beijing cyber security probe that left it unable to add users. "},{"start":62.437,"text":"That knocked the share price down 90 per cent. "},{"start":65.192,"text":"Uber was forced to write down its investment. "},{"start":67.809,"text":"It is now valued at $1.4bn. "}],[{"start":null,"text":"

"}],[{"start":72.02,"text":"There have been other disappointments. "},{"start":74.262,"text":"Uber sold its flying taxi project to Joby in exchange for a stake in the businesses. "},{"start":79.104,"text":"That allowed Uber to retain an interest in potentially market-moving technologies. "},{"start":83.547,"text":"Unfortunately, Joby’s share price has dropped more than 50 per cent since it listed via a Spac last year. "}],[{"start":90.53,"text":"Combined, Uber’s grab bag of equity stakes is worth just under $7bn. "},{"start":95.759,"text":"That is equal to about 13 per cent of the company’s market value. "},{"start":99.639,"text":"But as it pointed out to potential shareholders when it went public, stakes in other companies involve significant risks that are outside Uber’s control. "},{"start":107.094,"text":"Its own share price has more than halved over the past year. "}],[{"start":111.23,"text":"Its chief executive Dara Khosrowshahi insists that his focus is on positive net income and cash flow. "},{"start":117.35900000000001,"text":"The company says that its core business is already profitable. "},{"start":120.789,"text":"Analysts do not anticipate the group earning a net profit before 2024. "}],[{"start":126.24000000000001,"text":"Uber has waited too long to gain any returns on sideline equity investments. "},{"start":130.982,"text":"The stakes made sense at the time. "},{"start":133.162,"text":"Now what makes more sense is to sell them. "}],[{"start":135.64000000000001,"text":""}]],"url":"https://creatives.ftacademy.cn/album/75874-1656569411.mp3"}