Uber Technologies (NYSE: UBER) might have been one of the most anticipated IPOs of 2019.
It was talked about for years prior and investors were hugely excited by the prospect of getting a piece of the company. Finally, in May 2019, they had their chance.
But it wasn’t the skyrocketing ride to profits that investors were hoping for.
If you jumped on the bandwagon on IPO day, you’re only up 25% right now…and that’s after a hell of a ride.
In the first six months shares collapsed 40%. When they finally started heading back up, they almost managed to get back to that opening price.
But the March shutdowns and market collapse slammed shares all the way down to $14.82.
Since then, shares have seen recovery based on overall interest in technology stocks. Even more that that it the interest in technology stocks that aim to make our lives more convenient and support social distancing.
Uber has been a company with the mission that by changing how people, food and things move through cities, its platform opens up the world to new possibilities.
And its recent maneuvers to add more to the “things” category is what caught my eye.
More specifically, what put Uber on my radar today was the announcement that the company would acquire Drizly. If you don’t know, Drizly is the leading on-demand alcohol marketplace in the US.
It’s fully compliant with local regulation in more than 1,400 cities and works with thousands of local merchants across a majority of states.
The end goal is to integrate Drizly’s marketplace directly into the Uber Eats app while also maintaining the separate Drizly app.
That separate app will also be updated to include Uber’s routing and other technologies.
This is on top of the announcement last week that after a successful pilot program in three Texas cities, Uber Eats consumers in NYC can now request prescription delivery right in the app.
Through its partnership with Nimble New Yorkers can get delivery from a number of local pharmacies, with some restrictions of course.
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I’ve said it before, but I’ll say it again. Even if the vaccine proves effective and the world starts returning to a sense of normalcy, the genie of convenience is not one that can be put back into the bottle.
Uber is working to have a stronghold on that convenience.
The more services it can provide in the Uber Eats app, the more consumers will skip opening its competitors’ apps. The company already eliminated Postmates as a competitor by acquiring it in December.
There’s still the concern here of the company actually making a profit. The third quarter earnings did show net loss improving by 6% compared the third quarter of 2019. That’s despite extra COVID costs and mobility booking collapsing by 50%.
Uber Technologies will announce its fourth quarter earnings next Wednesday after the market closes, and I think the numbers will continue to show improvement.
In turn, share prices may actually take off like investors have been hoping for since the IPO.
To your prosperity and health,
Joshua M. Belanger