Travis Kalanick Is Exiting His Uber Holdings Uber Quickly • Hacker News Board

Re: Travis Kalanick Is Exiting His Uber Holdings Uber Quickly

#131

Post by kcanini » Mon, Dec 16, 2019, 6:13 PM UTC

nostrademons wrote: post #129

cVwEq wrote: post #98

Earlier quoted context omitted.

As an aside to the parent poster, an often-stated guideline for the maximum amount you should own in the companies you work for is 10% of your portfolio value [1][2]. Modern portfolio theory (Markowitz, et. al.) calculations for a bundle of assets probably would bear out that 20% in a single stock is not on the efficient frontier [3]. [1] https://www.marketwatch.com/story/dont-invest-in-your-compan... [2] https://www…

Depends how the company is doing. Depending on the internal transparency of the company, as an employee you're often privy to a lot of information that Wall Street does not have access to, eg. you'll oftentimes know their upcoming product pipeline, employee morale, culture, and key metrics for the success of the business that are not published in their financials. If those are doing well but Wall Street is treating t…

Even in that case, it may make sense to diversify. The market can remain irrational longer than you can remain solvent.

Re: Travis Kalanick Is Exiting His Uber Holdings Uber Quickly

#132

Post by wayoutthere » Mon, Dec 16, 2019, 6:14 PM UTC

frandroid wrote: post #117

toomuchtodo wrote: post #99

Earlier quoted context omitted.

You can still want to maintain influence without having personal/financial exposure to the consequences.

But that sends a wickedly powerful statement to the market that you as a remaining board member would not hold the shares of the company you oversee... That's the discussion here.

There are a lot of reasons a board member might reduce their stake in the company. Lack of belief in the company's strategy is a common reason, especially when boardroom drama is involved. I don't think investors will read anything into it other than Kalanick is rebalancing the risk profile of his portfolio now that he no longer has control of Uber.

Activist investors play this game all the time so it says nothing about the strategy one way or another, just that the appetite for risk is higher the more control you have.

Re: Travis Kalanick Is Exiting His Uber Holdings Uber Quickly

#133

Post by 8ytecoder » Mon, Dec 16, 2019, 6:17 PM UTC

aguyfromnb wrote: post #87

ralph84 wrote: post #40

Earlier quoted context omitted.

Every unprofitable growth company says they’re doing it “by choice”. And every unprofitable growth company burns investor dollars (where else would the dollars come from?). During Amazon’s unprofitable years many people were saying the exact same things about Amazon that people say about Uber now. Of course that doesn’t mean every unprofitable growth company is Amazon, but Amazon’s success means companies won’t stop…

> During Amazon’s unprofitable years many people were saying the exact same things about Amazon that people say about Uber now. Maybe "people were saying" the same things about Amazon then as Uber now, but that doesn't mean they are correct. Completely different business models. Amazon had billions in free cash flow going back to 2005, just no accounting profits. Uber has negative free cash flow. We hear the same thi…

People look at profits with a narrow focus. It's entirely possible for a widely profitable company to have no future than a company reporting a narrow loss. It's also possible that a company has reached it's end of days for lack of a way to sustain profits.

Hypothetically speaking, if there were a reporting mechanism that clearly separated operational expenditure from re-investments, Amazon and Uber would likely be in two different ends altogether. More importantly, Amazon didn't just reinvest into existing products, they were also adding entire new categories of businesses (AWS), new models of operation (2-day shipping) and relentlessly adding new categories (wider selection) - all at the same time.

It's possible that Uber might be doing something similar, I'm just not that aware of the breakdown of Uber's expenditures and losses.

Re: Travis Kalanick Is Exiting His Uber Holdings Uber Quickly

#134

Post by kyleblarson » Mon, Dec 16, 2019, 6:19 PM UTC

dannylandau wrote: post #14

I wonder what the tax rate on his windfall, 50%?

Long term cap gains since he certainly had an 83b letter in place so it'll be 23.8%. edit: Plus whatever CA state LTCG tax exists if he is a CA resident.

Re: Travis Kalanick Is Exiting His Uber Holdings Uber Quickly

#135

Post by nostrademons » Mon, Dec 16, 2019, 6:20 PM UTC

kcanini wrote: post #131

nostrademons wrote: post #129

Earlier quoted context omitted.

Depends how the company is doing. Depending on the internal transparency of the company, as an employee you're often privy to a lot of information that Wall Street does not have access to, eg. you'll oftentimes know their upcoming product pipeline, employee morale, culture, and key metrics for the success of the business that are not published in their financials. If those are doing well but Wall Street is treating t…

Even in that case, it may make sense to diversify. The market can remain irrational longer than you can remain solvent.

That saying's usually not true when you're dealing with employee stock compensation, where you own the shares outright and make enough in cash salary to live on. Ownership is forever (modulo a revolution or other forcible overthrow of the rule of law, in which case you have bigger problems). In the absence of leverage, you can afford to be perfectly rational and have an infinite time horizon.

Re: Travis Kalanick Is Exiting His Uber Holdings Uber Quickly

#136

Post by alehul » Mon, Dec 16, 2019, 6:22 PM UTC

cdmcmahon wrote: post #95

alehul wrote: post #16

Earlier quoted context omitted.

> Co-founders are supposed to have confidence in the business they built The business they built and still either run or largely preside over, however Travis was ousted— I'm not sure he'd agree with their current direction as a result.

He's still on the board...

The board supported him being ousted as CEO [1].

He can have a seat at the table, but the table is largely comprised of people who wanted him out, and can continue to make decisions he disapproves of.

This isn't a case of Larry Page and Sergey Brin at Google, or Bill Gates at Microsoft, where the founder is well-respected, left of their own will, and still maintains an influence in a meaningful capacity.

[1] https://www.reuters.com/article/us-uber-ceo/uber-ceo-travis-...

Re: Travis Kalanick Is Exiting His Uber Holdings Uber Quickly

#137

Post by authoritarian » Mon, Dec 16, 2019, 6:29 PM UTC

fastball wrote: post #116

jjeaff wrote: post #94

Earlier quoted context omitted.

$100m can very comfortably afford a private jet. Maybe not a brand new G6, but a small to mid size jet could be comfortably purchased and maintained while barely spending more than the market appreciation of that $100m.

A new mid-size jet will run you $10-20M. Pilots and maintenance will cost you $1M+ per year. Depending on how much you use it, that could be significantly more. Spending 10-20% of your net worth on a vehicle up front + 1% pa going forward is not "comfortably afford". If my net worth was $2M, I would not say that I could comfortably afford a lambo.

Don't buy a new mid-sized jet then...? You can certainly afford a small, used private jet if you have $100 million. Not to mention a lot of people that own private jets rent/lease them out, just like they do with yachts, which can help to offset a lot of the recurring costs. I know a guy that owns a relatively small business and he has a modest private jet (as modest as you can get while owning a jet) and he certainly doesn't have 100mm. Aviation is one of his hobbies, which likely plays into his decision, but it is feasible

Re: Travis Kalanick Is Exiting His Uber Holdings Uber Quickly

#138

Post by lotsofpulp » Mon, Dec 16, 2019, 6:33 PM UTC

rootusrootus wrote: post #76

thorwasdfasdf wrote: post #71

Earlier quoted context omitted.

It's not just that it's at all time highs. PE ratios are also at all time highs: that's the Price to earnings ratio. There's a number of indicators right now that are at all time highs like the Warren buffet ratio (GDP/earnings), all pointing saying this market is really expensive. This is the most hated bull market ever. None of the experts are buying heavily into this market (it's all stock buybacks that's driving…

Since you mention Warren Buffet, I will say that what makes me most nervous about the market is that collectively everyone seems to be concluding that it's overheated. By the time the hordes figure it out, it's already happened.

Have the hordes figured it out?

Re: Travis Kalanick Is Exiting His Uber Holdings Uber Quickly

#139

Post by Stasis5001 » Mon, Dec 16, 2019, 6:33 PM UTC

nostrademons wrote: post #129

cVwEq wrote: post #98

Earlier quoted context omitted.

As an aside to the parent poster, an often-stated guideline for the maximum amount you should own in the companies you work for is 10% of your portfolio value [1][2]. Modern portfolio theory (Markowitz, et. al.) calculations for a bundle of assets probably would bear out that 20% in a single stock is not on the efficient frontier [3]. [1] https://www.marketwatch.com/story/dont-invest-in-your-compan... [2] https://www…

Depends how the company is doing. Depending on the internal transparency of the company, as an employee you're often privy to a lot of information that Wall Street does not have access to, eg. you'll oftentimes know their upcoming product pipeline, employee morale, culture, and key metrics for the success of the business that are not published in their financials. If those are doing well but Wall Street is treating t…

As an employee at a megacorp, sure, you can see a little bit about how things are going from the inside. That said, you probably spend less time looking at reports than professional analysts. Secondly, sure, maybe you can see how great your company is, but do you have a frame of reference to a million other companies and their projects and cultures? There's a strong bias towards thinking you know more than the market that I would be wary of.

Re: Travis Kalanick Is Exiting His Uber Holdings Uber Quickly

#140

Post by toomuchtodo » Mon, Dec 16, 2019, 6:36 PM UTC

frandroid wrote: post #130

toomuchtodo wrote: post #124

Earlier quoted context omitted.

Of all the negative signals Uber sends, this is the one the market is going to take issue with?

Touché! But cult-like stocks have a stronger relation than usual to their founder(s)' actions.

Stock price doesn't seem to notice FWIW:

https://i.imgur.com/Z8XaO2P.png