Sections

ideals
Business Essentials for Professionals



$5.9bn Loss Incurred By Uber Due To Fall In Value Of Its Asia Investment


05/05/2022


$5.9bn Loss Incurred By Uber Due To Fall In Value Of Its Asia Investment
Uber, the ride-hailing and delivery service firm, has lost $5.9 billion, owing to its investments in other businesses.
 
Almost all of the loss, according to the corporation, was caused by a drop in the value of assets in businesses like as Didi in China and Grab in Southeast Asia.
 
Didi and Grab's stock has plummeted since they went public in New York last year. Despite the setback, Uber's CEO emphasised the company's efforts in recovering from the pandemic's effects.
 
"Our results demonstrate just how much progress we've made navigating out of the pandemic and how the power of our platform is differentiating our business performance," chief executive Dara Khosrowshahi said.
 
This occurred as the company announced that the number of journeys taken had increased by 18% in the three months leading up to the end of March compared to the same period last year. This resulted in a 136 percent increase in revenue.
 
Uber's first-quarter loss increased to $5.9 billion from $108 million a year ago, owing to a $5.6 billion reduction in the value of its holdings in other companies, particularly Chinese ride-hailing operator Didi.
 
Uber, on the other hand, has enough capital to hold on to those losing stakes and sell them at a later date, according to chief financial officer Nelson Chai.
 
Its stock fell 4.65 per cent in Wednesday's New York trading session.
 
Due to fierce competition in China, Uber sold its business in the world's second largest economy to Didi in exchange for a 18 per cent interest in the Beijing-based company in 2016.
 
Didi's market capitalization in the United States has dropped by more than 80 per cent since its $4.4 billion NYSE debut last summer.
 
China's internet authority ordered online businesses not to sell Didi's app within days of its IPO, claiming it illegally acquired users' personal data.
 
The company stated in December that it would delist from the NYSE and list in Hong Kong.
 
Didi confirmed this week that the US Securities and Exchange Commission was looking into its initial public offering (IPO).
 
Uber sold its businesses in Southeast Asia to Grab for a 27.5 percent ownership in the Singapore-based company in 2018, when both companies were still privately owned.
 
Grab's stock plummeted after its first public offering on the Nasdaq stock exchange in December of last year. Its stock market value has plummeted by about 75 per cent since its IPO, which was the largest ever by a South East Asian company in the United States.
 
In exchange for its Uber Eats operations in India, Uber received a share in Indian food delivery firm Zomato in 2020. Since its fantastic stock market debut in July, Zomato's shares have nearly halved in value.
 
(Source:www.techhistory.in)