My, how time flies. Less than two years ago, Uber’s disastrous IPO seemed to demonstrate that investors had lost their taste for cash-hungry companies with no clear path to profitability. Today, Uber capped a months-long rally to hit a high of $63, 40% higher than its IPO price—despite reporting that it burned through $3.3 billion in 2020.
Uber CEO Dara Khosrowshahi should grab the opportunity and raise some quick cash through a stock offering, as Elon Musk did at Tesla more than once last year. After all, who knows how long investors’ newfound love of Uber will last? And the company will need to raise cash at some point in the not-too-distant future, unless it figures out how to turn off the cash burn. Its cash reserves shrank to $6.8 billion at the end of December, from $11 billion a year earlier.