Uber IPO: What You Need to Know

On Tuesday, host Chris Hill and Motley Fool Funds Analyst Bill Mann answer a tweet sent to them by Liam McCusker, asking about the value of Uber. McCusker asked, "Is Uber really worth $17 billion?"

Chris explained that the latest valuations indicate Uber might be worth even more -- CNBC and New York Times analyst Robert Sorkin believes that Uber may be undervalued at $18 billion. For the German buffs, Bill believes that Uber is worth uder $18 billion. As a private company, Bill notes that Uber's financial structure is still a mystery, but he concedes that $200 million in revenue last year is impressive. Yet, comparing $200 million and $18 billion just doesn't compute for Bill. For the company to actually be valued at $18 billion, Bill thinks it would be a miracle ... which means it's still possible.

Bill thinks that Uber has proven itself as a taxi company or a car-services platform, but not much more. When viewing the company, an investor needs to focus on what the company has achieved and explore all the other possibilities of what Uber wants to do as a call option. Furthermore, it's impossible for a CEO to understand the difficulties and pressures in taking a private company public, and Bill believes that it takes a strong type of CEO to push back on that pressure. Uber's CEO has yet to be tried. Chris parallels the move to becoming a new parent, because no matter how many books you read, the reality is far different than what you expected.

And that's just part of the reason Fool Funds doesn't participate in IPOs, Bill said. In response to why analysts are giving the company the benefit of the doubt, Bill explored how the benefits are an inefficient use of the capital.

In the end, Bill thinks that everyone is getting far too excited about Uber -- if investors look at more than just the possibilities and also examine the risks, Uber is still up in the air.

While you're waiting for Uber's IPO, make sure your portfolio is well-rounded
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2989761, ~/Articles/ArticleHandler.aspx, 8/30/2015 1:58:53 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Chris Hill

Full-time host of the Motley Fool Money radio show, MarketFoolery podcast, and other things. Part-time connoisseur of movies, basketball & fine bourbon.

Today's Market

updated 1 day ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes