15 May 2019

South Africa: Uber's Skid - Another Perspective


Ride-sharing mega-giant Uber's listing has been something of a calamity, and the conventional wisdom is that the New York Stock Exchange listing on Friday was infected by its rival Lyft and the market turmoil caused by the US-China trade war. But what if those are not the reasons at all? Consider this for an alternative perspective: Uber is two contradictory things simultaneously - definitely the future, and also uninvestable. Is that even possible? Read on.

According to Gerrit Smit, head of equity management at UK-based investment firm Stonehage Fleming, Uber is an outstanding company that is definitely the future. It is also currently uninvestable, particularly from the perspective of traditional investment metrics, but even from the perspective of tech investors who typically don't focus too much on immediate profitability.

It's an unusual perspective from an unusual family office, developed by the storied Scottish financier and philanthropist Robert Fleming (the grandfather of novelist Ian Fleming) which, as it happens, is heavily invested in a range of tech companies.

How does this argument go? The problem, says Smit, is not necessarily the lack of profitability on its own, but the likely short-term future of the lift-sharing market and the low barriers to...

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