Uber Just Upped Its Street Cred, Posting Annual Profit For The First Time

Uber Just Upped Its Street Cred, Posting Annual Profit For The First Time
Paul Allison, CFA

14 days ago2 mins

Mentioned in story

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.

Uber stock
Source: Google Finance

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%.

Uber profit

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).



All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG