by Ian Harvey
November 07, 2019
Uber reported earnings on Monday, November 04, and shares declined to their lowest closing price on record Tuesday, after another quarterly loss of more than $1 billion. Shares continued to fall Wednesday after its IPO lock-up period expired.
But, members of “Stock Options Made Easy” are up 185% potential profit using options puts!
The Earnings Report.....
Uber Technologies Inc dropped over 10% after failing to provide third quarter results that assured investors.
Despite reporting top and bottom-lines that beat estimates, the stock took a hit as the company reported over $1 billion in net losses. Shares closed at $28.02 Tuesday, down nearly 40% since the IPO in May at $45 per share, but its value has taken a hit since then, as slower growth on several key metrics including bookings and user growth hurt investor confidence.
The Lockup Period Expires…..
Wednesday saw the lockup period expire, and shares plummeted more than 8% at one point in intraday trading, as roughly 90% of Uber’s stock was available for sale for the first time.
An IPO lock-up period places a restriction on insiders from selling shares of a company’s stock before it went public. The types of insiders include a company’s founders, owners, managers, and employees, and the waiting period typically ranges from 90 to 180 days.
The company managed to claw back some of the loss with the shares closing the day at $26.94, down 3.85%.
The Trade To Consider This Week…..
Uber Technologies Inc (NYSE: UBER) an American multinational
ridesharing company offering services that include peer-to-peer ridesharing,
ride service hailing, food delivery, and a bicycle-sharing system, will report
earnings after the market closes. The consensus estimate is for a loss of $0.83
per share on revenue of $3.74 billion......read more.....
Option trade to consider: Buy the UBER NOV 15 2019 30.000 PUT at approximately $1.80. (Bought in at $1.65)
Further Damaging Factors…..
Uber investor and Tusk Ventures CEO Bradley Tusk identified two fundamental problems and sources of concern for Uber investors like himself.....
First, management hasn't properly communicated its vision on why investors should stick with the company for the long term.
Second, although not specific to just Uber, there is a "fundamental misalignment" between the private market and public market.
Uber has the potential to be a great company but "maybe not" worth $40 billion, Tusk said. The public market dictates valuation which implies investors could decide on a more appropriate valuation is $20 billion.
Uber’s CEO, Dara Khosrowshahi stated this week, "We're not counting on rationalization near term in Q4, but we do think that all of these markets need to rationalize." His comment acknowledges that the faulty unit economics the company utilized in order to upend competition has drastically weighed on the business’ efficiency.
Uber has now laid out a timeline to profitability on an adjusted EBITDA basis, with Uber shooting for full-year 2021.
However, to ultimately reach the 2021 goal, Uber will have to undergo drastic cuts and financial restructuring.
YOU NEED TO BE IN TO PROFIT!
Join us today and see what future trades will be recommended!
Stock Options Made Easy “Earnings Predictions” members entered a trade Monday which is now up 185%.
The question remains: “Will we exit this trade now, or wait, and hope for more profits?”
What will “Stock Options Made Easy” advise members to do?
AS ALWAYS THE DECISION IS YOURS!
An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!