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Uber Turns to Saudi Arabia for $3.5B Cash Infusion

nytimes.com

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Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#31

Post by linkregister »

breitling wrote: post #7
craigvn wrote: post #3

Blood money while they continue to execute people in the street.

Get off your moral high-ground. We (USofA) still continue to execute people as well.

I originally was going to make the distinction between executions for murder versus executions for acts of political dissidence. Then I remembered a high-profile UAV strike of a pro-terrorism speaker and recruiter. [1]

Anwar al-Awlaki was a conspirator for a deadly terrorist attack, so that would ordinarily meet the requirement for guilt of murder.

The UAV strike was actually an act of war against an Al-Qaeda officer; killing of enemy soldiers not carrying weapons (such as artillery spotters, etc) is permitted under the laws of war.

Anyway, it really muddies the waters and I think the criticism of both US and Saudi practices is appropriate.

[1] https://en.wikipedia.org/wiki/Anwar_al-Awlaki

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#32

Post by godembodied »

So what if they execute people for what they think are crimes? Who are you to judge what people should or should not do? What you label as evil someone will label as good. There is no absolute evil/good, as you're trying to portray it. It only your opinion vs. their opinion.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#33

Post by patmcguire »

supster wrote: post #24
charlesdm wrote: post #20

Earlier quoted context omitted.

It's possible to sell those shares on a secondary market, i.e. seed investors might have already cashed out by now.

Except in Uber's case where they are famous for keeping tight control on secondary sales. http://fortune.com/2014/06/20/uber-plays-hardball-with-early...

I can't find the link because the huge media churn makes it impossible to find anything that isn't the most recent story, but didn't they ban Chris Sacca from the Uber office for hanging around and buying secondary shares from people?

I think the lockdown happened after that.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#34

Post by petra »

Retric wrote: post #6

Uber needing 3.5B is a huge negative sign IMO. Clearly something is broken with their business model.

I don't think UBER has finished discovering their business model, and they probably knew so all along. their end model might be something like via(ridewithvia.com, just raised $100 million, an in-depth user review here[1] ) - shared transportation, filling each vehicle with 3-7 people at peak times at much lower costs.

The question now is: can UBER go from here to there ? and how fast ?

My answer is yes, i think they can. Assuming via has some unique software/skills(maybe), they can just buy them, and scale that service(drivers will be happy for more business, taxi users will share a good deal letting UBER reach non-taxi users fast).

[1]"I took Via to work everyday for a month. Here's what I learned" - http://www.brickunderground.com/live/commute-via

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#35

Post by CPLX »

supster wrote: post #21
rexreed wrote: post #16

Earlier quoted context omitted.

It's only Fat city if there's an exit at that valuation. We're talking Theranos style valuations here that can disappear at any time. They better find an exit scenario before the music stops or it's a world of hurt, especially for the later stage investors.

True, but those are the obvious risks you take as an investor. And late stage investors often negotiate downside protection in the form of liquidation multiples or ratchets.

Yes precisely. But early stage investors almost never get those kind of protections. How can they possibly not be getting wiped out just a little more with every sky-high valuation round with a preference attached?

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#36

Post by rqebmm »

rexreed wrote: post #19
koolba wrote: post #10

Earlier quoted context omitted.

> Uber needing 3.5B is a huge negative sign IMO. Clearly something is broken with their business model. If someone is willing to give you $3.5 billion dollars I'd argue you've got a solid business model. Either that you're just really good at raising capital.

Let's revise "solid business model" to "solid ability to sell the company's value". A solid business model doesn't require this sort of continuous cash infusion.

require != want

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#37

Post by [deleted] »

slg wrote: post #8

Putting aside whatever you think about Saudi Arabia or its government, it is inarguable that this move will be highly controversial. It makes me wonder why Uber pulled the trigger on this knowing there will be a backlash. Wouldn't it have to be because of pricing? I wonder if the leadership of Uber simply didn't want to see any dip in the valuation and Saudi Arabia was the only one out there willing to meet that pric…

[deleted]

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#38

Post by nugget »

rexreed wrote: post #16
paulsutter wrote: post #12

Earlier quoted context omitted.

Uber has apparently raised $12.5 billion[1] and is valued at over $60 bilion. So seed investors are in fat city as long as the valuation holds. If the valuation goes down, it all depends on the preference multiples (which are likely greater than 1), and how low the value goes. Uber has very significant revenue and growth (see the new Mary Meeker presentation), so they are a very valuable company. It may not be wise t…

It's only Fat city if there's an exit at that valuation. We're talking Theranos style valuations here that can disappear at any time. They better find an exit scenario before the music stops or it's a world of hurt, especially for the later stage investors.

The only thing that can ''take out'' Uber is widespread adoption of autonomous vehicles, whereupon ride sharing becomes a physical-capital intensive business (cars) rather than the current human-capital intensive business (drivers/their driver network). Autonomous vehicles (and the infrastructure to support them) significantly reduce the amazing network efforts that Uber has enjoyed to date. An investment into Uber at these valuations is a bet that this future adoption (to the point where it would disrupt the massive revenue Uber realizes from places like LA, NYC, and SF) is decades further out than some futurists predict. Even transitioning into this brave new world Uber still has a lot of brand value, although there will be a ton of competition (all auto makers such as Tesla, GM, Ford, and new entrants such as Apple, Google, and Amazon), ultimately benefiting consumers: enjoy your $12.50 ride (est. 35% of which will be local and state taxes) from SFO to 3rd and Market.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#39

Post by jessedhillon »

rexreed wrote: post #19
koolba wrote: post #10

Earlier quoted context omitted.

> Uber needing 3.5B is a huge negative sign IMO. Clearly something is broken with their business model. If someone is willing to give you $3.5 billion dollars I'd argue you've got a solid business model. Either that you're just really good at raising capital.

Let's revise "solid business model" to "solid ability to sell the company's value". A solid business model doesn't require this sort of continuous cash infusion.

> A solid business model doesn't require this sort of continuous cash infusion.

Where is this assumption that this cash is required coming from? A very common use for investment is to accelerate plans which would otherwise unfold over long/impractical timelines. Another common use is to get ahead of competitors.

I know much of HN is very eager to see all billion dollar valuations deflate so as to prove that extremely conservative risk profiles are the only strategies worth considering, but there's nothing inherently troubling about a highly-valued, late-stage company raising so much money.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#40

Post by gorkemyurt »

seizethecheese wrote: post #17
breitling wrote: post #7

Earlier quoted context omitted.

Get off your moral high-ground. We (USofA) still continue to execute people as well.

Get out of your moral valley, get a better vantage on the moral topology around you. The USA executes people, true, but generally not political opponents. Saudi is an order of magnitude worse than the US government.

guess who is Saudi's biggest trade partner?

https://en.wikipedia.org/wiki/Economy_of_Saudi_Arabia#List_o...

or who actually sells them guns?

https://en.wikipedia.org/wiki/Saudi_Arabian_Army

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