If you want to know how to lose $1 billion, Uber Technologies Inc. can show you how.
After releasing a report detailing company-related issues — ranging from sexual assaults to murders — the company experienced a 2.2% drop in premarket trading last Friday.
It fell 2.7% to $27.86 by the end of trading Friday, and sat at $28.00 even by about 2 p.m. EST today.
That drop constituted a $1.1 billion loss in the company’s market cap.
A big reason for the drop was due to the company reporting nearly 6,000 sexual assault cases along with 58 people killed in car crashes and nine murders in 2017 and 2018.
Uber (NYSE: UBER) sidestepped the numbers in the report by stating: “The vast majority (99.9%) of Uber trips end without safety-related issues at all.”
“It’s important to understand the scale of Uber’s business in interpreting this data,” the report said. “This year, nearly 4 million Uber trips happened every day in the U.S. — more than 45 rides every second.”
While coming clean about issues, the report did little to impress investors as the stock led to the major market cap loss for the company.
It continues a trend of interesting market news for the ride-hailing company.
Earlier this month, Uber co-founder Garrett Camp sold 1.27 million shares for $35.2 million, according to Barron’s. Fellow co-founder Travis Kalanick has sold more than $1.7 billion worth of Uber stock.
It has all capped a year of terrible news following Uber’s horrendous initial public offering launch in May. Uber’s stock started trading 7% below its IPO price when it was launched in May.
Uber’s History of Losing Money
It’s not the first time Uber has lost money.
In fact, it’s not the first time Uber has lost billions of dollars in a short amount of time.
In the second quarter of 2019, Uber reported a $5.2 billion loss in the three-month period that ended June 30. Conversely, it only lost $878 million in the same quarter a year ago, according to The Verge.
Losses in the third quarter of 2019 were bad but not $5.2 billion bad.
Uber’s market losses totaled about $1.1 billion in the third quarter and its stock price continued to spiral after it actually beat earnings and revenue estimates for the quarter.
The company raised its guidance by $250 million following its third-quarter report, but its losses are still expected to be between $2.8 billion and $2.9 billion in 2019.
That’s all on top of the $1 billion in losses the company reported in the first quarter of 2019.
Since 2014, Uber’s market losses have totaled $12.1 billion. While its revenue continues to grow, its costs and expenses are growing at a faster rate.
In 2018, Uber reported $11.3 billion in total revenue, but its costs and expenses were in at around $14.3 billion.
Uber’s average loss each year has been around $3 billion.
Light at the End of the Uber Loss Tunnel?
While its stock price took a nosedive Friday, it started to rebound slightly Monday.
Of the 2.7% drop Friday, Uber made up 1.4% of it on midday trading Monday before crashing back down to nearly flat for they day by 2 p.m. EST. But, it’s still not enough to erase the amount of red in the company’s ledger.
Uber’s market losses have been particularly dramatic in December.
The company closed Nov. 29 trading at $29.60 a share but dropped to $27.86 on Dec. 6 following the release of its report.
The total losses for Uber won’t be made up any time soon. In fact, Uber CEO Dara Khosrowshahi said he doesn’t think the company will reach profitability on an EBITDA basis until 2021, according to Forbes.
So if there is a light at the end of Uber’s market-loss tunnel, it doesn’t appear to be shining any time soon.
