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Uber Wants to Be the Next Cash-Burning Unicorn to Sell Bonds

Discussion in 'News' started by Lets_Eat, Oct 11, 2018.

  1. Lets_Eat

    Lets_Eat

    Location:
    Los Angeles
    Uber Wants to Be the Next Cash-Burning Unicorn to Sell Bonds
    By
    Alexandra Scaggs
    Oct. 11, 2018 7:00 a.m. ET
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    The ride-sharing company Uber is selling $1.5 billion of high-yield debt. Chris J. Ratcliffe/Bloomberg
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    Ride-sharing app Uber Technologies is marketing $1.5 billion of high-yield bonds to large investors in a private offering, according to two people familiar with the deal.

    Uber is one of many cash-burning unicorns tapping the bond market to raise cash, as managers of high-yield bond funds have been eager to get their hands on new debt. The ride-sharing company follows Tesla (TSLA), which issued debt in mid-2017, and WeWork, which sold its own high-yield note earlier this year.


    The company is selling a $500 million five-year note that isn’t callable for two years, and a $1 billion eight-year note with a three-year non-call period, the people said.


    Under new CEO Dara Khosrowshahi, Uber reported a net loss of nearly $900 million in the quarter ended June 30, though quarterly gross bookings grew 41% from the prior year. At the time of publication, the company hadn’t responded to a request for comment or provided more recent data. It wasn’t clear whether losses increased in the third quarter; the people familiar with the transaction said the company’s audited financial information was only available to investors who agree to join the private offering and sign a nondisclosure agreement.


    Early expectations were for the bonds to be sold with coupons between 7% and 8%. That’s closer to WeWork’s debt, which has a coupon of 7.875%, than it is to Tesla’s, which has a coupon of just 5.3%, though the latter company’s bond yield is substantially higher now.

    The bonds are being sold with something like an “investment-grade covenant package,” one person said. If that holds, the protections for lenders and bondholders would be about as weak as they would be for an established company that isn’t expected to default at all.

    That does make some sense, however. Covenants are meant to prevent shareholders from siphoning away assets and cash if a company runs into trouble, and this is an “asset-light” app that burns cash. (Uber had less than $1.4 billion of property and equipment on its balance sheet as of the second quarter.) Basically, if you’re worried that Uber could run into trouble during a downturn, there isn’t much reason to own the bonds.

    Write to Alexandra Scaggs at alexandra.scaggs@barrons.com
     
    tohunt4me likes this.
  2. mbd

    mbd

    Location:
    Dallas
    Got to be better than TSLA bonds which was sold 2 years back
     
    tohunt4me likes this.
  3. AHAAHAHA they've having to tap the HY markets! boober is such a junk company. we're entering the final phase. soon perception among the investor crowd will start to turn and when it does it'll happen fast.
     
    MHR, tohunt4me, HotUberMess and 3 others like this.
  4. Thank you investopedia..



    Many companies that used high yield bonds to finance themselves during the “dot com” boom of the late 1990s soon failed, and along with them, the high yield market took another turn for the worst in terms of net returns. This crash did not result from the actions of someone trying to sabotage the market or by unscrupulous S&L investors. Instead, this bust happened because investors kept falling for the dream of huge profits that the Internet promised through its ability to reach a global market. Investors put their money into ideas, not solid plans, and as a result, the market faltered.

    OMG...

    This is uber in a nutshell...

    Tic Toc... tic toc...
     
  5. Yup. The same @@@@@@ed mistakes are being made 20 years later by a different generation of idiots who felt they didn’t need to learn or read about the past.
     
    tohunt4me, MHR and MoreTips like this.
  6. TwoFiddyMile

    TwoFiddyMile

    Location:
    charlotte
    Driving:
    Taxi
    When you lose 3 to 5 billion per year, and your total VC was less than 20 billion...
    This was bound to happen.
    Uber+no more capital=death.
     
  7. 1.5xorbust

    1.5xorbust

    Location:
    San Diego
    It won’t help their cause for this or the IPO if the stock market goes into the ****ter.
     
    tohunt4me and Lowestformofwit like this.
  8. Lowestformofwit

    Lowestformofwit

    Location:
    Somewhere over the rainbow
    Driving:
    Livery
    “Come in, Mr Bond
    We’ve been expecting you....”
     
  9. TwoFiddyMile

    TwoFiddyMile

    Location:
    charlotte
    Driving:
    Taxi
    The IPO is a joke. It's literally the only way directors get any (non salary) monies out of this albatross.
     
  10. Lowestformofwit

    Lowestformofwit

    Location:
    Somewhere over the rainbow
    Driving:
    Livery
    Not Initial Publc Offering, then?
    More like Incredible Pay Out.
    Dara’s IPO 2019 promise all makes sense now.
     
    tohunt4me and TwoFiddyMile like this.
  11. HotUberMess

    HotUberMess

    Location:
    Orlando
    Well, all I know is in ‘17 after they shipped me off to fight, some New York financier rolled in here one day and hog-glowsered and tub-wankled my grandfather into mining out the whole town in exchange for shares in something called the United Coke Company. Do you know with those stock certificates are worth today? JUST ABOUT THE FINEST OUTHOUSE WALLPAPER YOU’VE EVER SEEN!
     
    Last edited: Oct 12, 2018
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  12. TwoFiddyMile

    TwoFiddyMile

    Location:
    charlotte
    Driving:
    Taxi
    What film?
     
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  13. HotUberMess

    HotUberMess

    Location:
    Orlando
    Nothing but Trouble :p
     
    tohunt4me likes this.
  14. Lee239

    Lee239

    Location:
    Lee county fl
    They claim to be like Amazon but are selling debt before the IPO. $1.5 billion would be $1.5 trillion if they were Amazon in 20 years. Uber won't last that long.
     
    tohunt4me likes this.
  15. TRANSLATION = UBER IS BROKE

    AGAIN

    How many times can they sell this " Company"?

    No WONDER THEY CANT COVER ON DEMAND PAY !
     

    Attached Files:

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  16. Lee239

    Lee239

    Location:
    Lee county fl
    they can't be broke, they are taking 45% of most rides. If they are broke they can never become profitable. They have $20 billion from investors and probably at least that or more in revenue.
    But something is wrong.
     
    tohunt4me likes this.
  17. Yet they are offering $900.00 incentives to NEW DRIVERS while doing Nothing for established Drivers.
    They are selling Nothing but an idea.
    ANYONE CAN REPRODUCE THE " TECHNOLOGY"
    A malfunctioning idea and a Dubious Name.
    Whats it Worth ?
    " Smoke & Ashes".

    They " HAD " $20 Billion.

    SQUANDERED !

    Just like the Driver Talent and Dedication that they HAD !

    Uber will be a business school Lesson on mismanagement in Business.

    " CAR OF THE FUTURE ! The Edsel "!

    Over hyped and under developed.
    Spending cash in all the WRONG places.

    Didi may offer 15 cents on the dollar for a " warm seat" to slide into.

    There will be NO printed shares.
    Virtual Shares.
    Because Uber Algorithm bylaws FORBID CREATING ANYTHING REAL!
     
  18. wow just about every sentence in your post is dead wrong. they have raised around $15 billion of VC funds from inception to today. They have burned almost all of it. They are tapping the junk markets b/c they can't sell any more equity b/c early investors don't want their shares diluted (further). They have negative margins of around 145%.

    Have you noticed that any time you take an express stool trip (and most normal stool trips) that isn't matched boober loses money?
     
  19. Lee239

    Lee239

    Location:
    Lee county fl
    I don't drive anymore and out market is too slow for Pool.

    and I meant had $20B that's the number I heard. They have also had more people invest such as Google and Middle east funders.

    It may be wrong, but if they can't hold out until 2019 and the IPO they are in big trouble, plus they have to show that the company has value to the SEC.

    also Travis took $1.4 billion but I think that's other foolish investors that bought his private stock and he wanted to sell more.
     
    tohunt4me likes this.
  20. TwoFiddyMile

    TwoFiddyMile

    Location:
    charlotte
    Driving:
    Taxi
    Where Have You Been, Lee? We've been discussing this stuff at nauseam for 4 solid years. I don't want to pick on you but you seem like you're a little behind the curve in several areas. Regarding Uber, that is.
     
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