Uber Sees Third-Quarter Loss of $800 Million
Uber would likely have to pare some of the losses before its eventual IPO in order not to spook potential investors
Uber Technologies Inc. continued to grow sales but also continued to lose money in the third quarter, according to people familiar with its results, which could cool for now any chances for its hotly-anticipated initial public offering.
The ride-hailing company lost at least $800 million in this year’s third quarter, not including certain items like taxes, interest and the results of its China business, which it sold in the period, the people said. Uber boosted sales to $1.7 billion in the quarter, from $1.1 billion in the second quarter, the people said.
News site the Information reported the results earlier Monday.
Uber, a closely held company valued around $68 billion, doesn’t disclose financial results publicly. It held a call with investors last week to discuss its results.
The third-quarter loss was due in part to hefty spending on promotions, which include cash payments to recruit new drivers and investment in new businesses like its self-driving car unit and food delivery through UberEats, the people said. Uber would likely have to pare some of the losses before its eventual IPO in order not to spook potential investors.
The $800 million quarterly loss is on top of at least $1.2 billion in this year’s first half, the people said. Gross revenue, the amount of sales Uber books before taking a commission, rose to $5.4 billion from about $5 billion in the second quarter.
During the latest quarter, Uber agreed to sell its China operations to Didi Chuxing Technology Co., its rival there, after a costly battle for market share. Uber agreed to take a 17.7% stake in Didi, while Didi agreed to invest about $1 billion in Uber as part of the deal.
With the deal, Uber can concentrate on its other global markets, particularly the U.S. where it has a big lead over Lyft Inc. Its U.S. rival, also based in San Francisco, was valued most recently at $5.5 billion and earlier this year hired Qatalyst Partners LP, a boutique investment bank known for helping companies find a buyer.
Uber is in a high stakes showdown with regulators in California where it is testing autonomous vehicles on San Francisco streets, despite pushback from the Department of Motor Vehicles, which said the company is doing so without a necessary permit. The company agreed to buy autonomous big rig outfit Ottomoto LLC for about $680 million earlier this year.
Apple’s Tim Cook assures employees that it is committed to the Mac and that ‘great desktops’ are coming
One of the memes to come out of the somewhat contentious rollout of the MacBook Pro is that Apple has given up on the desktop Mac. Given the slower upgrade cycle of desktops and how well my Retina 5K iMac is holding up, it took me a while to pay attention to what was going on there — until it had reached a fever pitch.
The consensus was that Apple is no longer interested in keeping up its desktop business because the portable market was eating it alive.
In a posting to an employee message board, CEO Tim Cook seems intent on putting that particular branch of discussion to bed.
“Some folks in the media have raised the question about whether we’re committed to desktops,” Cook wrote. “If there’s any doubt about that with our teams, let me be very clear: we have great desktops in our roadmap. Nobody should worry about that.”
Cook cites the far better performance of desktop computers, including screen sizes, memory, storage and more variety in I/O (ha) as a reason that they are “really important, and in some cases critical, to people.”
So no matter how you feel about the state of the Mac at the moment, you have new machines to look forward to. No mention of whether that meant iMac or Mac Pro or both, but at the very least it’s encouraging to those of us who couldn’t live without a desktop computer.
Also posted to the message board was a section on what Cook thinks is Apple’s greatest differentiating factor, which I found particularly interesting. Though the Mac statements may be the news hook here, hence the headline, there are some interesting things in this section to pull apart, as well.
He’s responding to the following question: What do you consider to be Apple’s biggest differentiator, and what can employees do to foster and advance those efforts?
He first says that the people and culture are the foundation, which in itself is really not that revelatory; every tech CEO says that.
“Our greatest differentiator is our culture and our people. They are the foundation by which everything else comes about. Without great people and a great environment that people can live in, we wouldn’t have intellectual property. We wouldn’t have the best products. We wouldn’t have the inventions or features I mentioned earlier,” Cook responds.
“I think it’s that ‘change the world’ attitude and boldness that’s deeply embedded in our culture, that ‘good isn’t good enough.’ All of this is the fuel for everything else that we do.”
This kind of thinking in its culture is often cited by Apple executives and ex-employees as a truism. Apple pushes. That doesn’t always (ever) result in perfection but it does result in truly impressive results from time to time, like the recent AirPods, which are an incredible weaving together of Apple’s hardware and software teams to produce something that works so much better than what came before it’s laughable.
Cook also re-emphasizes this commonly stated stance in the posting. “From a strategic point of view, we also focus on things where software, hardware and services all come together and bring out the magic that only Apple can,” he says. “That’s our secret sauce. It shows up in a lot of different places, and it’s something that we look for in new employees.”
But what comes after is probably the most interesting. He says this:
You can rarely see precisely where you want to go from the beginning. In retrospect, it’s always written like that. But it’s rarely like that. The fantastic thing about Apple employees is they get excited about something, and they want to know how it works. What it will do. What its capabilities are. If they want to know about something in an entirely different industry, they start pulling the string and see where it takes them. They’re focused more on the journey, which enables so many great things to happen.Just in the past couple years, pulling that string on Watch and fitness led to ResearchKit, and ResearchKit led to CareKit. We’ve got a ton of things on our roadmap that I can’t talk about, but that I’m incredibly excited about, that are the result of pulling that string and not being bound by the box that so many people in life get bound by.
No company on the planet is willing to go as far as Apple to find out whether there is a there, there. The Apple Watch launched with so many features because Apple was willing to let it define its own role as determined by customers. It was probably the world’s most expensive focus group. And it managed to do that while still providing a genuinely useful tool right out of the gate.
His conclusion drives that point home.
“With so many things that we’ve done, we don’t do it because there’s a return on investment. We don’t do it because we know exactly how we’re going to use it. We do it because it’s clear it’s interesting and it might lead somewhere. A lot of the time it doesn’t, but many times it leads us somewhere where we had no idea in the beginning.”
I think this is an often overlooked cultural strength at Apple. A willingness to devote extra-ordinary resources, time and attention to a problem or piece of technical research because there is a feeling that it may lead somewhere — eventually. All too often technology companies are obsessed with the goal. The end result. And everything is bent into service of achieving that goal.
This methodology is not ineffective, but it is short-sighted. You may be able to get the result that you wanted by driving hard toward that goal, but you’re never going to recognize the better, potentially more rewarding result you didn’t expect. You’ll never see it because any branch that leads you to such a potentiality would have gotten killed off as a distraction or failure before it had time to bear fruit.
Anyway, this isn’t a philosophical screed, it’s internal PR, but it rings true with the company’s public actions and what I know of its internal culture. Interesting stuff.
In the same Apple Web posting, Cook also talked about why he chose to go to the meting with President-elect Trump last week, and you can read about that here.
The full postings are below:
We had a big MacBook Pro launch in October and a powerful upgrade to the MacBook back in the spring. Are Mac desktops strategic for us?The desktop is very strategic for us. It’s unique compared to the notebook because you can pack a lot more performance in a desktop — the largest screens, the most memory and storage, a greater variety of I/O, and fastest performance. So there are many different reasons why desktops are really important, and in some cases critical, to people.The current generation iMac is the best desktop we have ever made and its beautiful Retina 5K display is the best desktop display in the world.Some folks in the media have raised the question about whether we’re committed to desktops. If there’s any doubt about that with our teams, let me be very clear: we have great desktops in our roadmap. Nobody should worry about that.What do you consider to be Apple’s biggest differentiator, and what can employees do to foster and advance those efforts?Our greatest differentiator is our culture and our people. They are the foundation by which everything else comes about. Without great people and a great environment that people can live in, we wouldn’t have intellectual property. We wouldn’t have the best products. We wouldn’t have the inventions or features I mentioned earlier.I think it’s that “change the world” attitude and boldness that’s deeply embedded in our culture, that “good isn’t good enough.” All of this is the fuel for everything else that we do.From a strategic point of view, we also focus on things where software, hardware and services all come together and bring out the magic that only Apple can. That’s our secret sauce. It shows up in a lot of different places, and it’s something that we look for in new employees.You can rarely see precisely where you want to go from the beginning. In retrospect, it’s always written like that. But it’s rarely like that. The fantastic thing about Apple employees is they get excited about something, and they want to know how it works. What it will do. What its capabilities are. If they want to know about something in an entirely different industry, they start pulling the string and see where it takes them. They’re focused more on the journey, which enables so many great things to happen.Just in the past couple years, pulling that string on Watch and fitness led to ResearchKit, and ResearchKit led to CareKit. We’ve got a ton of things on our roadmap that I can’t talk about, but that I’m incredibly excited about, that are the result of pulling that string and not being bound by the box that so many people in life get bound by.With so many things that we’ve done, we don’t do it because there’s an return on investment. We don’t do it because we know exactly how we’re going to use it. We do it because it’s clear it’s interesting and it might lead somewhere. A lot of the time it doesn’t, but many times it leads us somewhere where we had no idea in the beginning.
La banque Reyl et François Reyl font appel de leurs condamnations dans le procès Cahuzac
L'établissement financier genevois et son principal dirigeant ont décidé de faire appel, a appris «Le Temps». Un second procès Cahuzac pourrait donc avoir lieu à l'horizon 2018
Reyl et Cie et François Reyl ont décidé de se pourvoir en appel après leurs lourdes condamnations à l'issue du procès Cahuzac, le 8 décembre dernier. Le délai limite pour faire appel était ce lundi à 18 heures. «Le Temps» a obtenu confirmation de cette information auprès du Tribunal correctionnel de Paris.
Jérôme Cahuzac et son épouse Patricia avaient été déclarés coupables de fraude fiscale et de blanchiment de fraude fiscale par la 32ème chambre du Tribunal correctionnel. L'ancien ministre du budget, qui avait aussitôt décidé d'interjeter appel, avait écopé de trois ans de prison ferme, échappant toutefois à une incarcération immédiate. Patricia Cahuzac, aux commandes de leur clinique parisienne de chirurgie capillaire, s'était vu, elle, condamnée à deux ans de prison ferme et n'a pas fait fait appel. Elle devrait bénéficier d'une peine aménagée et ne pas subir d'incarcération.
Lire aussi: Affaire Cahuzac, la justice française fait un exemple
Pour la banque, une décision difficile
Pour la banque genevoise et son principal dirigeant, la décision à prendre était difficile car elle signifie la prolongation d'une bataille judiciaire qui pèse sur sa réputation depuis plusieurs années. L'établissement, qui avait transféré les avoirs de l'ancien ministre français du budget à Singapour en 2009, avait été condamné à 1 875 000 euros d’amende (2 millions de francs), soit le maximum prévu par la loi française. François Reyl avait pour sa part écopé d’un an de prison avec sursis et d’une amende de 375 000 euros (404 000 francs), tout comme l’intermédiaire Philippe Houman, basé à Dubaï et également sur le banc des accusés.
Des peines unanimement jugées extrêmement sévères, alors que les avoirs incriminés – d'abord détenus sur un compte UBS, puis sur un compte à la banque Julius Baer de Singapour, derrière une société panaméenne – n'ont jamais dépassé 600 000 euros, et que le préjudice fiscal pour l'Etat français se chiffrait en dizaines de milliers d'euros seulement – préjudice d'ailleurs régularisé depuis par les époux Cahuzac.
Une injustice des peines?
Plutôt que d'acquitter ces amendes record, Reyl et Cie et François Reyl ont donc suivi les conseils de leurs avocats Me Paul-Albert Iweins et Me Kiril Bougartchev. Ces derniers leur avaient recommandé d'interjeter appel dès l'annonce du jugement, pour dénoncer l'injustice des peines et faire valoir leur bon droit.
L'établissement helvétique n'a, dans l'affaire Cahuzac, pas contrevenu au droit suisse et ses conseils se sont évertués à expliquer que les procédures employées pour gérer, puis transférer les avoirs de Jérôme Cahuzac avaient seulement un caractère technique, sans volonté de dissimulation ou d’opacité.
La banque, «instrument de dissimulation»
Des arguments balayés par le tribunal selon lequel la banque Reyl a été «l'instrument de la dissimulation des avoirs de Jérôme Cahuzac». «Reyl et Cie poursuit le jugement du 8 décembre, a agi comme guichet unique, d'une part, en assurant par ses organes toute la mécanique du transfert des avoirs qui est ainsi opérée en interne et, d'autre part, la gestion à distance qu'elle assure pour le compte du titulaire du compte transféré à l'étranger avec la possibilité de s'adresser toujours avec le même numéro et le même code».
La banque Reyl n'a pas communiqué au sujet de cet appel suspensif des peines prononcées. L'établissement garde, au regard de la loi française, la possibilité de se désister de ce pourvoi dans les mois à venir et de régulariser sa situation en s'acquittant des amendes alors majorées.
Possible: un nouveau procès Cahuzac parallèle à celui d'UBS France...
Le futur procès en appel de l'affaire Cahuzac, s'il a lieu, pourrait être concomitant avec celui de l'affaire UBS. La grande banque suisse a été plusieurs fois mise en examen par la justice française pour blanchiment aggravé de fraude fiscale, démarchage illicite et subornation de témoins. Le parquet national financier, qui traite également l'affaire Cahuzac, a demandé le renvoi d'UBS en procès au début novembre 2016 et l'on attend maintenant la décision des juges d'instruction.
Technology will not replace humans in the financial markets
People are still the best judges of soft data, says Man GLG’s Pierre-Henri Flamand
Recently I watched a computer playing a game that I’d enjoyed as a boy — Pong. It is one of the oldest computer games, in which a bat bounces a ball against blocks, attempting to destroy them all. The computer was terrible at first, but by the end of 600 iterations, it was unbeatable, learning from its mistakes not only how to win, but how to win in the swiftest possible time.
It’s an innocuous example, but one which illustrates the significant advantages that computers have over humans in the performance of routine tasks.
Goldman Sachs recently announced that two-thirds of all trades on major stock exchanges are now carried out by computers. Despite this, we strongly believe that humans still have a central role to play in the financial markets, and will do for the foreseeable future.
Let’s consider one element of our fundamental research process — the visit to a company’s management. Human beings are deeply social creatures, with the ability to use instinct, to read body language and to judge atmosphere.
It’s hard to imagine a computer knowing precisely when to ask the killer question of a chief executive, and how to judge the response. The portfolio manager will have seen numerous similar management teams and will be able to measure the chief executive’s answers versus his or her experience of similar situations.
Will computers be able to get a feel for the culture of a company, for how the employees are being motivated, for the ambience on a factory floor?
The answer is maybe — but not yet. Deep learning is moving quickly and is making advances which, until only recently, seemed unimaginable. There is technology in development that will analyse company conference calls, letting portfolio managers know not only whether the management is telling the truth, but also how confident they are in what they’re saying.
In our view, however, such analysis will for some time yet, still need to go through a human portfolio manager who can synthesise it into an effective investment decision.
We were recently told by the head of research at a leading investment bank that 2016 would be the first year that he had not hired a single analyst. All of his recruitment budget went on technology and people to operate that technology.
Humans will have an integral part to play but it is not unfair to say that the investment firm of the future is likely to look very different to its current incarnation.
We think that there will be fewer people, and many of those who are there will be tasked not with executing trades and analysing results, but with designing and validating algorithms, with maintaining and optimising the vast amount of technology that will be needed. At the same time, we believe that it will still be humans, rather than machines, making the most important decisions of all.
All this technology will merely support human functions in the efficient execution of routine tasks, rather than replacing them wholesale.
For the time being, humans do fundamental analysis better than machines and I believe this will remain the case for some years, perhaps decades, to come. People judge the calibre of soft data about companies better than computers.
Chief executives are human — illogical, impulsive, unpredictable — and it takes a human analyst to predict the vagaries and eccentricities of their behaviour. As such, we believe that humans will continue to be the ultimate decision makers in the investment process, utilising the advantages that technology confers.