Uber to list today

When it comes to public markets, growth sells. Uber lists on the New York Stock Exchange later today, and we will buy the shares in the full knowledge that they will lose lots of money this year, and next year too. The focus is on the top line. They sell a service which has changed the way that we live.



In overnight headlines, Uber has indicated that it will raise $8.1 billion in the listing process. The stock has been priced at $45 a share, near the bottom of the range indicated earlier, which will give it a market value of $75.5 billion. That's not too frothy, so I'm thrilled. More about that process here, on Bloomberg.

CEOs of solidly profitable old-era industrial companies get defenestrated if their earnings guidance is lowered. Imagine if an unprofitable restaurant chain tried to build by listing on a promise to add more outlets? What makes tech companies different? It's the belief that their service to humanity is highly appreciated, and that their revenues will rise in time to cover their cost bases many times over. The winners will have brands that become verbs (Googling, WhatsApping, Ubering, etc).

Does this feel like a movie you've seen before? In some ways it is. More than 600 companies staged initial public offerings in 1999 and 2000, just prior to the dot-com bubble bursting. Only 14% of those companies were profitable, according to research I saw mentioned recently in the Wall Street Journal. There is less reason to fear that these days. Fewer start-ups are going public this time and those that make it are bigger, well capitalised and already have a proven business idea.

Jeff Bezos of Amazon was once asked if he could even spell profit. He answered, "P-R-O-P-H-E-T".