Uber's stock surged last week after CEO Dara Khosrowshahi announced it plans hit a certain kind of "profitability" by the end of this year. But Uber's definition of "profitability" leaves out a whole host of expenses.This story requires our BI Prime membership. To read the full article,Uber excited investors and analysts last week when it predicted it would hit "profitability" by the end of this year.
Instead, they were promising that the company would be profitable on a basis the company itself has created and defined. Thanks in part to such numbers, the company's stock has fared poorly since it went public last year, consistently trading below its $45 offering price and the company's $72 billion peak private valuation.
At least on the surface, Uber officials already had something to crow about. On its adjusted EBITDA basis, its loss shrank from $817 million in the fourth quarter of 2018 to $615 million in the just-completed period.Uber's 'profitability' figure isn't actual profitability On top of all that, it excludes "other items not indicative of our ongoing operating performance," a catch-all phrase that Uber could, in theory, use to leave out just about any expense.
Twenty years ago during the dot-com boom, many startup companies touted their own custom-created financial and performance metrics instead of emphasizing how they were doing under standard accounting principles. Many of those companies touted "pro-forma" profits that were derided as excluding everything but the kitchen sink.
Uber was one of the first companies I be would be worth $109billion.