Uber looks like the next Amazon because it loses billions

In approaching its public market debut, Uber hopes that investors will align the stock with that of Amazon, rather than its close rival, Lyft. Uber plans to compare itself to Amazon during its pre-IPO roadshow to justify the billions of dollars it continues to lose, the New York Times reported.

It is no wonder that Uber chooses Amazon as a model, judging by the performance of its action. Amazon's share price has increased 18-fold, from $ 18 in its early days in 1997 to nearly $ 2,000. Lyft, on the other hand, dropped from its initial price of $ 72 in March to just over $ 57. Uber did not immediately respond to a request for comment on his no.

Amazon's success in the public market, despite the loss of money it has lost for a good part of its existence, is a favorite comparison for other start-up not-for-profit companies. But Amazon is the exception and not the rule.

Amazon's IPO serves as a convenient point of reference for Uber, which reported a loss of $ 1.85 billion in adjusted EBITDA in 2018 and a slowdown in revenue growth. She also announced a loss of about $ 1 billion for the first quarter of 2019 in her S-1 deposit last week. Amazon also made its debut without generating any profits, indicating that it was considering investing in the development of its business in new areas, as Uber also said.

Like Amazon, Uber is proud to diversify its activities beyond the basic service for which it is known. While Lyft focuses less on carpooling and personal mobility, like electric scooters, Uber has expanded to include food delivery, freight transportation and even flying cars.

But for Amazon, profitability was largely driven by Amazon Web Services, which accounted for 13% of Amazon's total sales and 50% of its overall operating profit in the first quarter of 2019. It is not yet clear whether Uber is experiencing the same type of breakup. company that can generate profits. It is unlikely that other Uber bets bring as much value as AWS to Amazon, has already declared Wireless Fund's senior portfolio manager, Paul Meeks, to CNBC.

"They will try to take advantage of their platform for other things, but the others will be transport, because it is their job and the transport sector has many established players", said Meeks.

After Uber priced between $ 44 and $ 50, its valuation rose from $ 100 billion to a range of $ 80.53 billion to $ 91.51 billion on a fully diluted basis. But even at the lowest value, Amazon's Uber comparison reinforces the "fear of missing out".

"It's a huge scare," CNB badyst Dan Ives told Wedbush Securities earlier. "It has been a capital event in terms of investing in technology stocks over the past 20 years."

Subscribe to CNBC on YouTube.

Look: this is how Uber presents itself to investors