08/08/2022
When Uber reported last week that it was finally cash-flow positive, I immediately knew it was total BS. Maybe not an outright lie, but BS nonetheless. Yet, the stock still mooned based on the perception that it is a profitable company.
And while we’re on the subject of BS, how about that $400B meme stock?
Just another week in our totally rational, completely normal financial market!
Peace out.
Mike
Business Bites
Analysis, Reviews, and Weird Business News
Uber and Bullsh*t Earnings
Investing
“I think that, every time you see the word ‘EBITDA,’ you should substitute the words ‘bullshit earnings.'" -Charlie Munger
Uber’s UBER 0.00%↑ most recent quarterly results sent investors into an orgasmic frenzy, with the stock closing up 15% in a day after the company reported positive free cash flow for the first time. But when you look closely, there is less to their “adjusted EBITDA” than meets the eye.
Uber’s reported operating income of $439M includes stock-based compensation (SBC) of $470M and a working capital decreased of $604M—meaning that Uber is STILL deeply unprofitable.
Meanwhile, the business media continues to report Uber management’s “adjusted” earnings metrics as thought they were God’s honest truth. A lot of folks are gonna be pretty pissed when they find out that the company they were told was profitable is, in fact, a big money pit.
The $400B Meme Stock in the Room
Stocks
AMTD Digital HKD 0.00%↑ briefly became the 10th largest tech firm in the world after its stock rose 30,000% in three weeks.
Wait a sec…who the hell is AMTD?
On paper, they’re a tiny Chinese fintech company that only generates $25M in revenue. But according to management, they are a “leading” financial institution in Hong Kong.
We align ourselves with clients, shareholders, business partners, and investee companies to build an ever-extending, inter-connected network that creates value for all stakeholders, or the ‘‘AMTD SpiderNet’’ ecosystem. We believe that we our [sic] ‘‘AMTD SpiderNet’’ ecosystem is the bedrock of our success.
Sounds legit 👍
Opinion: Famed value investor Michael Burry said in a tweet that “the Silliness is back” in the stock market amid huge moves in beaten-down tech names (the tweet was soon deleted, per usual for Burry).
Mogul Moves
Tracking Big Investors and Business Leaders
Rocket Companies RKT 0.00%↑ (a.k.a. Rocket Mortgage) CEO Jay Farner is on a buying spree of his company’s shares, plowing over $4M of his own money into the stock over the last month. Farner previously said on Twitter that he planned to buy $36M of Rocket stock this year.
Billionaire short seller Jim Chanos is betting against data center REITs such as Digital Reality Trust DLR 0.00%↑ , arguing that they’re going to get rekt by public cloud providers such as Google, Amazon, and Microsoft.
In an interview last week, Papa Elon Musk stated he believes that inflation has peaked and that we will have “mild recession” that could last for 18 months.
Several members of the Walton family (descendants of Walmart founder Sam Walton) and investor Melody Hobson are buying the Denver Broncos for $4.65B—double the previous record for an NFL team.
Billionaire software mogul Robert Brockman, possibly the largest tax evader in U.S. history, kicked the bucket last Friday at 81.
Memes and Sarcasm
Between this guy and Cramer I’m going to go broke
It really do be like that
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Contact
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