Ackman runs a super-concentrated fund and rarely takes new positions. This one would be worth about $2.25 for the Fund that has somewhere around $20 billion under management.
Uber shares dumped on earnings earlier this week but stormed back the following day and continued higher today. This certainly won’t hurt.
I can make a pretty good case for Uber as it’s churning out a 5% free cash flow yield and still growing very rapidly.
The bear case is that Tesla and other robotaxis are going to destroy the business. However the bulls case — which the CEO has outlined — is that there are going to be many auto companies that solve autonomous driving. Even if Tesla solves it a year before anyone else, it can’t produce nearly enough cars to dominate the market before others catch up.
That will ensure it’s a fragmented market and that Uber remains at the center of the network ecosystem, taking what is essentially a royalty as it’s 180 million users (and growing) continue to use it whether it’s hailing a car driven by a person or a robot.
This article was written by Adam Button at www.forexlive.com.
