Bill Ackman reveals a position in Uber. Why he buys shares

Ackman runs a super -concentrated fund and rarely takes up new positions. This one would be worth around $ 2.25 for the fund that has a place about $ 20 billion under management.

Uber shares dumped on earnings earlier this week, but stormed back the following day and continued higher today. This will certainly not hurt.

I can make a pretty good case for Uber as it is to wipe out a 5% free cash flow and still grow very quickly.

The Bear case is that Tesla and other Robotaxis will destroy the company. However, the Bulls case -as CEO has outlined -is that there will be many car companies that solve autonomous driving. Even if Tesla solves it a year before anyone else, it cannot produce almost enough cars to dominate the market before others catch up.

It will ensure that it is a fragmented market and that Uber stays in the middle of the network’s ecosystem, which takes what is essentially a royalty as it is 180 million users (and grows) continues to use it, regardless of Whether it pays tribute to a car driven by a person or a robot.

Here’s what Ackman said, including his celebrity names Drop:

I have been a long -term customer and admirer of Uber who began when Edward Norton showed me the app in his early days. I was also lucky to be a day-a-investor in the company through a small investment in a venture fund.

While a big business, Uber suffered from erratic leadership. Since joining the company in 2017, Dara Khosrowshahi CEO has done an excellent job of transforming the company into a very profitable and cash generative growth machine.

We believe that Uber is one of the best managed and highest quality companies in the world. Remarkably, it can still be purchased with a massive discount to its inherent value. This favorable combination of attributes is extremely rare, especially for a large cap company.

We will soon have more to share about our thinking about the company.

Uber shares have risen almost 8%.