Travis Kalanick selling nearly a third of Uber stake for $1.4B
reuters.comPrevious discussion: https://news.ycombinator.com/item?id=16075911
If I was sitting on all those billions in stock I would be unable to sleep one single minute until I turned at least one billion to cache. With 2/3 of the stock and $1 billion securely under my matrace I would not feel bad if the stock tenfolded in the future.
one billion in "cache". Typo or pun?
typo :)
This shouldn't be a surprise, given Softbank is buying from insiders. In fact it would be a poor signal if the shares weren't bought from a variety of individuals who invested early.
Having that amount of money to hand likely means that Kalanick is going to go off and spend a lot more time doing other things. That could also be good for Uber.
I find it a bit surprising that investors would want it under those terms. Aside from the (negative) signaling value of insider sales, the company is still burning cash and it's a little weird that over half the capital they are raising will be a payout to the founder rather than an investment in the business. Unless they consider getting rid of him an investment like you imply?
Uber Meltdown incoming? Jokes aside, do they still have ridiculous losses at the moment?
According to Statista [1], Uber lost $1.46 billion in the third quarter of 2017. And that is a significant increase from losses of just a billion dollars a year earlier. But, gross revenue for Uber reached nearly $10 billion from July to September of this year. Sounds not bad, however, the majority of the money goes to drivers, while uber received $2.0 billion. Which means that Uber spent about $3.5 billion in expenses to earn $2.0 billion in revenue.
[1] https://www.statista.com/chart/12059/uber-revenue-bookings-a...
Then why do people rate them so highly?!? Not even Amazon operated like this.
At this point Uber resembles Webvan.com, than Amazon.com.
Does anyone really believe that they're going to recover the money invested in Uber? Let alone get more on top of that.
I don't get it...
This is an example of someone getting rich without increasing economic welfare. It goes against what Paul Graham writes about wealth creation and confirms Tim O’Reilly's view [2] that many people get rich by selling shares to suckers.
[1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2933177
[2] https://wtfeconomy.com/what-paul-graham-is-missing-about-ine...
I don't know about you, but the existence of Uber has increased my quality of life. Also, just the decrease in drunk-driving accidents that easy access to rides has brought about is worth a lot. It's easy to see the value Uber has added, and these are just a few easy points. There's a lot more.
Everyone is free to make public predictions about the future prospects of Uber, including the author of [1] and yourself.
But this is not an example of the notion that "many people get rich by selling shares to suckers", and this is not the kind of thing O'Reilly was talking about.
The people who have invested billions of dollars in Uber are not "suckers". They are some of the most sophisticated and experienced investors on the world, and they have access to information that is not available to anybody else, including me, you and the paper's author.
Most importantly, they have skin in the game, that the rest of us, including the author, do not. If they are wrong about their investment decisions, they will lose significant amounts of money personally and on behalf of their limited partners, which will hurt their reputations and prospects for attracting more funds in the future.
None of this means that I think Uber is certain to succeed. Of course nobody knows.
But it's unquestionable that Uber has already created vast amounts of economic value already (for people - particularly several women I know - who feel safer in Ubers than they did in cabs, for drivers who make a living from Uber, and for people who can afford to pay for rides more often than they could before Uber existed), and the investors who believe it will continue to create more value are well qualified to make that judgement.
For what it's worth, I dislike Kalanick as a character, and I have no great love for Uber as a company.
I just care about accuracy in discussions like this.
I'm not a fan of either Uber or Travis Kalanick, but I'm not sure I understand the difference between Kalanick selling his stake in Uber and Bill Gates selling his stake on Microsoft. What counts as 'increasing economic welfare'?
He already owned the shares, he's technically been rich for a long time now. Since the latest share sale was at a 30% price reduction, surely the previous investment rounds were worse?
Can you point to some specific articles by Paul Graham to explain what you mean?
There is one article where he writes how people/hackers get rich by creating wealth [1]. This is not the case with Travis and Uber, which the article I've linked to shows. It's also mentioned in his article on economic inequality where he asserts that people get rich because they are more productive than others [2].