14 days ago • 2 mins
What’s going on here?
Uber announced its first-ever annual profit on Wednesday, which might just be enough to shake its reputation as a loser.
What does this mean?
Uber might’ve replaced the term “hail a cab” in modern vocabulary, but the ride-hailing and food delivery app is still known for posting the biggest loss within a day of debuting on the US stock market. Clearly, though, cash can forgive a multitude of sins. Predictions that Uber would turn its first profit brought investors on board, pushing the company’s stock to an all-time high. This time, that trust was rewarded. Uber did make more than $1 billion in profit last year, promising that the cash would keep coming in. Investors have been burned before, though, so they want Uber to hold itself to account by paying out a dividend – a plea that could be granted or denied as soon as next week.
Why should I care?
For markets: A new attitude.
Tech investors used to scoff in the face of dividends, so enamored with eccentric founders’ visions of world-dominating computer power that they were happy for every spare penny to be funneled straight into the cogs. But nowadays, super-rich US tech firms seem to think they can do both. Meta recently announced its first-ever dividend payment while pledging more investments in the future. Investors were only too happy to have their cake and eat it too, sending the social media giant’s stock up over 20%.
The bigger picture: Amazon won’t budge.
Microsoft, Apple, and Meta all hand out dividends now, but Amazon’s keeping its mitts firmly in its own pockets. The ecommerce behemoth batted off any suggestion of such a policy in a recent conference call, saying that there are plenty of places to put cash besides shareholders’ wallets. Investors must have been brushing up on stoicism: they haven’t taken any frustration out on its share price (yet).
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