The relentless stock market drop is starting to spook tech CEOs. Over the weekend, Shopify’s CEO Tobi Lütke, perhaps irritated by his stock’s 75% drop so far this year, questioned whether Wall Street analysts were held accountable for their work. Even more telling was Uber CEO Dara Khosrowshahi’s staff memo—first reported by CNBC—revealing his takeaways from meetings with investors over the past few days. “The market is experiencing a seismic shift and we need to react accordingly,” Khosrowshahi wrote in the memo.
His primary message was that Uber has to be more careful in its spending (“we will treat hiring as a privilege”). That makes sense right now, although most CEOs would attribute such a shift to economic worries, rather than the stock market. Well, at least Khosrowshahi is being honest about what motivates him. What was stunning, though, was his statement that “the goal posts have changed. Now it’s about free cash flow.” Uh, Dara, the profitability goal posts have been planted in the same spot for several years now. It’s just that you weren’t paying enough attention. The clue should have been Uber’s stock trading below the IPO price for most of the three years since the company’s public debut.