Economy, Auto

Uber Suffers $1.27b Loss in H1

Uber Suffers $1.27b Loss in H1Uber Suffers $1.27b Loss in H1

Uber, the ride hailing service, has reportedly lost $1.27 billion in the first half of 2016 alone. This whopping loss is operational and not a result of one time charges or anything of the sort.

In the first quarter of 2016 alone, the company lost $520 million compounded by a loss of $750 million in Q2.

According to Forbes, Uber is now valued at about $69 billion.

In 2015, Uber had lost at least $2 billion. Revenues in the second quarter (June end) were about $1.1 billion, up about 15% sequentially from the $960 million in revenues for the quarter ended in March 2016. Bookings for the second quarter were $5 billion versus $3.8 billion in the March quarter for a sequential growth rate of 32%.

With mounting losses, few would want to invest in Uber that no doubt has scorching revenue and bookings growth, but its losses are also growing at an equal pace.

With the kind of losses it is seeing, it looks like Uber will have a hard time coming to market unless management and bankers are counting on the greater fool theory. That is, there will always be investors out there who will buy the shares once they start trading, hoping for the next fool to come along and buy the shares at an even higher price.

We have already seen how much trouble Uber’s competitor Lyft is having in trying to sell itself. No one wants to touch it despite chatter that Lyft had approached the likes of Apple AAPL -0.59% and Google GOOGL +0.28%/Alphabet to try to get a buyout done.