How Uber is surprisingly immune to coronavirus

Update19 days ago
After a sharp technical unwind on Wednesday, Uber rallied over +38% on Thursday after demonstrating on an investor call the resilience of its business model to coronavirus-driven slowdowns.
The 4 key takeaways:
1.) They have few near-term debt obligations.
Uber has raised debt on relatively lax terms with no maturities until 2023.
2.) Even with an 80% slowdown, their Rides business can break even.
What’s not very well-appreciated is that two-thirds of Uber’s cost structure is variable.
As a result, the Rides business can likely withstand an 80% drawdown in bookings and still break even on an EBITDA basis.
3.) Uber Eats is seeing a massive uptick in restaurant signups.
Eats is seeing a 10x increase in restaurant signups since just last week, potentially helping offset some of the decline seen in Rides.
And most importantly…
4.) They have plenty of liquidity, including $10 billion in unrestricted cash.
Management believes that Uber can withstand even the most dramatic, “extreme edge case” scenario (assuming an 80% decline in rides and no recovery).
In that environment, it would still end the year with $4 billion in cash plus a fully untapped $2 billion credit line, placing it in a superb financial position.
As of this writing, UBER was a portfolio holding of Titan Invest. This security may cease to be a portfolio holding at some point in the future.

Become a Titan investor today.

Titan Invest is an SEC registered investment adviser. By using this website, you accept our Terms of Use and Privacy Policy. Titan’s investment advisory services are available only to residents of the United States in jurisdictions where Titan is registered. Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities. Past performance is no guarantee of future results. Any historical returns, expected returns [or probability projections] are hypothetical in nature and may not reflect actual future performance. Account holdings are for illustrative purposes only and are not investment recommendations. The content on this website is for informational purposes only and does not constitute a comprehensive description of Titan’s investment advisory services.
Refer to Titan Invest’s Program Brochure for more information. Certain investments are not suitable for all investors. Before investing, consider your investment objectives and Titan’s fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Brokerage services are provided to Titan Clients by Apex Clearing, an SEC registered broker-dealer and member FINRA/SIPC. For more information, see our disclosures. Contact: 110 Greene Street, Suite 910, New York, NY 10012. Information provided by Titan Support is for informational and general educational purposes only and is not investment or financial advice.
© Copyright 2020 Whisker Technologies, Inc. All rights reserved.