Uber, Postmates Agree on $2.65B All-Stock Deal • Hacker News Board

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#301

Post by pedrocr » Mon, Jul 06, 2020, 6:28 PM UTC

marvin wrote: post #191

TheSpiceIsLife wrote: post #186

Earlier quoted context omitted.

It's a wealth transfer scheme. Wealth is transferred from ordinary folk via the IPO-retirement-fund axis to the plethora of agents involved in the whole scheme, from the employees bashing out code and UX, right through to everyone involved the M&A and IPO and the whole tax / tax agent / government tax agency cadre. It's not trickledown . It's deluge-up economics.

Huh. That's a novel use of stupid index fund money. Just get your shitty investments listed on the stock exchange and cash out. Index fund buyers don't care, they'll swallow it right up and it's free to crash and burn at their expense. You could even do it deliberately, as long as it follows securities regulations. Being a pure momentum strategy, index investing has no intelligence. At one point this would make index…

I don't see how this reduces returns for indexers in particular. Investing in an index means you get the market average. This may result in lower returns for the total market and thus also for indexers but for some active investors to overperform thanks to this some other active investors will need to underperform. Winning that directional bet requires someone else to take the other side of the bet and lose. Total market returns are zero sum.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#302

Post by mrnobody_67 » Mon, Jul 06, 2020, 6:42 PM UTC

For insider background info: Postmates had to do a "pay for play" at one point, wiping out investors who wouldn't put more money into the company because it was so desperate for cash.

The company also was shopped around for years by Frank Quattrone, who runs the "most" successful M&A advisory business - QATALYST. They didn't get anywhere with a deal, this was led by a different bank after they were fired.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#303

Post by drusepth » Mon, Jul 06, 2020, 6:50 PM UTC

richthegeek wrote: post #170

WrtCdEvrydy wrote: post #165

Earlier quoted context omitted.

The issue is mostly limited by requirements to get food there quickly. If we knew what we wanted ahead of time, scheduling delivery ahead of time would make it easy... since you could use a delivery route (to deliver 2-3 items nearby). A single winner may be able to make it work since you can do 1-2 pickups and deliver to two nearby homes.

Uber Eats has done this to me and it made me stopped using them. Driver needs to wait for the second meal to be prepared, pack it together, take a detour to the other place and spend time delivering it. So your meal arrives late, cold, and crushed after you paid full-price for the delivery.

Yep, I recently stopped using Doordash for this reason exactly.

My driver picked up my meal (from about 10 blocks away), then proceeded to drive downtown to pick up another meal, then to the other side of town to deliver it, then finally back to me.

My food arrived almost 2 hours after I ordered it, cold, soggy, and leaking in the bag.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#304

Post by mrnobody_67 » Mon, Jul 06, 2020, 6:51 PM UTC

mardifoufs wrote: post #88

texasbigdata wrote: post #21

Earlier quoted context omitted.

Not sure you can do the division like that without knowing what percent of the company the contributed capital represented.

Oh, yeah that's an embarassing lapsus.To my defense,it seems like most of the equity is owned by investors and not founders, so the average return of the 900m$ is probably still around 3x~. It also seems like they have never been valued higher than the price Uber paid for them so odds are few investors got really burnt regardless of when they invested.

Some investors got wiped out when the company had to do a pay to play, I believe.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#305

Post by ckdarby » Mon, Jul 06, 2020, 6:55 PM UTC

bobobob420 wrote: post #297

nielsole wrote: post #187

Earlier quoted context omitted.

Downvoted you. Someone may be despicable, but that is no reason to dehumanize them.

how do you downvote people? I only have the option of upvote.

I think at 500 karma points you get the option to downvote comments.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#306

Post by notyourday » Mon, Jul 06, 2020, 7:21 PM UTC

dannyr wrote: post #253

baxtr wrote: post #206

Earlier quoted context omitted.

Huh. Interesting! How about a food truck with a kitchen that drives a pre-defined route to delivers pre-ordered food?

Without the cooking part, Sprig was doing this back in 2014. Delivery staff drives around a neighborhood with a bunch of hot meals. Sprig only offered 2-3 dishes.

Sprig went out of business.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#307

Post by Jommi » Mon, Jul 06, 2020, 7:23 PM UTC

rswail wrote: post #207

Jommi wrote: post #33

Earlier quoted context omitted.

It's been an M&A company for years now. Just look at its portfolio of ownerships in competing local leaders like Didi, Yandex and Grab. It's a perfect food delivery ride hailing super app investment fund!

Didi and Grab weren't M&A to Uber, Uber in their cities/countries were acquired by Didi/Grab via stock.

How is that different? You could just rephrase what you said to say:

Uber purchased non-trivial shareholder positions in their global competitors.

For example the case in Russia was a quite literally a merger. Uber and Yandex made a joint venture, which operates in Russia and some former eastern bloc countries.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#308

Post by dsl » Mon, Jul 06, 2020, 7:42 PM UTC

jacobr1 wrote: post #262

marvin wrote: post #224

Earlier quoted context omitted.

It's false that no fund manager is consistently beating the market; you can easily find actively managed funds that have beaten the market for the last 5 years. The big debate is whether this is due to luck or skill, whether it's possible to tell the difference and whether it's possible to determine which fund manager will be successful in the future. Uber is part of some indexes; S&P500 isn't the only one. The effic…

> The big debate is whether this is due to luck or skill, whether it's possible to tell the difference and whether it's possible to determine which fund manager will be successful in the future. And the other factor is this: if it is skill, do the high-fees still give you a better risk-adjusted return?

> do the high-fees still give you a better risk-adjusted return?

Yes. With your standard 2 and 20 fee structure, you don't pay performance fees on anything below 8% returns. Performance fees are where bonuses come from, so anyone coming up short sees capital and employees disappear overnight.

RenTech has a 40+% performance fee on their Medallion fund because it consistently generates 60% returns YoY.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#309

Post by 0zymandias » Mon, Jul 06, 2020, 7:54 PM UTC

kumarvvr wrote: post #256

0zymandias wrote: post #18

I am bullish on this as a recent shareholder. We are now in the consolidation phase of delivery service where fewer companies mean less competition, more efficiency and better economics. This is where Dara’s strength is. He has a history of great dealmaking and acquisitions. I expect Uber to thrive as the industry consolidates.

> fewer companies mean less competition, more efficiency and better economics Can you explain this sentence? I always thought more companies, implies more innovation, and thus more efficiency.

Imagine a market where there is one food delivery company rather than ten:

a) at a restaurant, rather than having ten different delivery people pickup, One person can pickup ten orders.

b) 10x more consumers means that the average distance between deliveries shortens.

It’s not going to be quite this efficient but directionally more scale means more efficiency.

In addition, less competition means that Uber can charge more for their services.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#310

Post by cwhiz » Mon, Jul 06, 2020, 8:07 PM UTC

0zymandias wrote: post #18

I am bullish on this as a recent shareholder. We are now in the consolidation phase of delivery service where fewer companies mean less competition, more efficiency and better economics. This is where Dara’s strength is. He has a history of great dealmaking and acquisitions. I expect Uber to thrive as the industry consolidates.

This is the same model that Uber at large is following with the taxi service. The underlying premise is that if Uber can just get a monopoly they’ll finally stop losing a billion dollars every month.

I doubt that Uber will be allowed to monopolize this industry. And if they did, I doubt that customers would be willing to pay the premium.

I doubt the validity of the food delivery model anywhere but the most dense urban areas. And in those areas competition is fierce and regulators are quick to pounce.

Just because Amazon lost money for a decade doesn’t mean every single company will follow that same trajectory.