Investors (click on inset) could be pardoned for wondering why IPO underwriters for Lyft and Uber have used accounting trickery that smells worse than ten-day-old fish in order to promote the deals. Is bogus too strong a word? Judge for yourself. In their prospectuses, neither firm subtracted promotional incentives and refunds from sales totals, as is customary. This allowed them to grossly overstate revenues and profits. In Lyft’s case, revenues would have been 16% lower than the $2.16 billion reported and Uber’s would have been 12% lower than the $11.27 billion reported. These numbers were aired in a Wall Street Journal op-ed piece Monday by Howard Schilit, co-author of Financial Shenanigans.
Passengers Don’t Count
What adds to the stench is that in order to use these accounting gimmicks, the ride-hailing companies had to categorize their drivers as customers. Passengers seem not to matter: “Because end-users access our platform for free and we have no performance obligation to [them], [they] are not our customers,” Uber’s SEC disclosure filing notes without a trace of irony. This doublespeak would be laugh-aloud-funny if not for fact that similar chicanery is undoubtedly a key ingredient in keeping the ten-year-old bull market going.
Schilit exposes the accounting ruse for exactly what it is by asking this question: Who would Uber/Lyft consider the customer in a self-driving car? It’s a question that most of the bozos clamoring for Lyft shares, and Uber’s when it goes public, are evidently not taking too seriously.
The trend The trend The trend.
Are they all on the ‘wrong side’ of a new trend in play?
1) MINNEAPOLIS (WCCO)– A Minnesota woman is breaking boundaries in the modeling world, becoming the first model to wear a hijab and burkini for Sports Illustrated Swimsuit.
2) Apr 1, 2019 – The fast-food chain follows in the footsteps of White Castle and Carl’s Jr. in offering a meatless burger. … Starting April 1, Burger King is selling a new kind of Whopper that it claims is identical in taste to its traditional beef patty, with just one difference:
3) Uber has prided itself on diversifying beyond the core service for which it is known. While Lyft has narrowed in its focus on ride sharing and personal mobility, like electric scooters, Uber has expanded into food delivery, freight and even ””’flying cars””’.
4) Kate Smith statue covered up in Philadelphia as late ‘God Bless America’ singer faces new scrutiny. The Flyers also covered up a statue of Smith that has stood at Philadelphia’s sports complex since 1987.
5) New York Yankees in halting the playing of Kate Smith’s rendition of “God Bless America” at home games New York Yankees, who for 18 years had played the recording during the seventh inning stretch.
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GNC Buy Back collapse 04292019 Falls 97% in price.
For GNC Holdings Inc., it seemed like a good idea at the time: a $500 million share repurchase plan, when borrowing money was cheap and the supplement business was booming.
That buyback, kicked off in November 2013, turned out to be mistimed. Within weeks, shares of the purveyor of vitamins and testosterone-boosters hit an all-time peak. Pressure from rivals including online retailers like Amazon.com punished the company’s bottom line in the years to come. Same-store sales plummeted.
Have a great day Rick.