Uber is not a publicly traded company, but if it were, I would recommended shorting as many shares as you could borrow, beg or steal. That’s because the four-year-old purveyor of on-demand transportation is probably as insanely overvalued as venture-stage companies ever get. And that’s saying something, since, six years into a bull market, greed, recklessness and stupidity in the investment world have never been more cocksure. In December, when Uber promoted a $1.2 billion round of financing, investors effectively valued the company at $40 billion. That made it bigger than 359 of 469 companies listed on the Fortune 500 — bigger, in fact, than: Kraft Foods Group, Delta Air Lines, General Mills, CBS, Rite Aid, Macy’s, Viacom, Dollar General, Kellogg, KKR, Nordstrom, Halliburton Company, Archer-Daniels Midland, Omnicom Group, Charles Schwab Corporation, YUM! Brands, DISH Network, Aetna, ConAgra, Hormel Foods and Best Buy, to name just a few.
Earlier, when Uber was valued at a mere $18 billion, its initial backers stood to make 2000 times their initial investment. Will enough greater fools eventually come along to take them out of their shares [click to continue…]