Uber Investors Clash with Board Over Voting Power
wsj.com
wsj.com
Uber investors are not alone - Facebook and Google investors also have little control.
Uber has been around for 8 years now and it's asking for billions more from its investors to prop up massive operating losses while it takes longshot bets in heavily competitive spaces.
This is basically a story of investors thinking that the magic bullet for more Google/Facebook-style successes was giving founders unilateral control of the companies, and then saying, "Oh, wait."
They did $777m in sales for year six ('09), with $229m in net income.
To put that into amusing perspective, Netflix did $186m in net income for fiscal 2016 - their 18th year in business.
It's more net income (again, just in year six) than all of these following companies combined have produced in their entire histories: Uber, Didi Chuxing, Lyft, Zillow, Pinterest, Yelp, WeWork, Snapchat, Twitter, Groupon, JD.com, Zynga, Spotify, Reddit, GoDaddy, Pandora, Blue Apron, Quora, Shopify, Angie's List (could add a lot more to this list)
I'm not aware of any tech start-ups from the last ten years, that are printing income at an impressive level (something akin to the profit ramp of a Google or Facebook). Airbnb might be a candidate for a large income generator, that segment has good margins if expenses are tightly managed; it was founded in 2008, so it's about to age-off that list.
There certainly may be some young profit machines hiding in China, as a universe unto itself it can be difficult to track all the start-ups there. Jinri Toutiao for example, is at or around $2.5x billion in revenue for 2017, after just four years, a rather extraordinary growth rate for an ad business. As an aggregator, you'd think that would have tremendous margins, but they're raising tons of capital, so I'd guess they're currently spending at a very high level.
Adding it all up would be interesting. The data may even be available.
I don't understand your point about greed. Do you propose some alternative structure to corporate ownership? Seems beside the point of negotiating over voting rights.
Some people decide to buy, at say $54 in 2004. Others avoided the temptation for "greed," and decided not to buy.
Then the stock went up 18x.
Who's greedy now?
Lack of discipline is more precise. Greed parses as everything from myopia to selfishness. (Though even then, nobody on the Board is close to suffering actual losses.)
Dear Mr. Kalanick, Mr. Graves and Mr. Camp: We represent Shervin Pishevar and Steve Russell, individually, jointly and as putative class representatives on behalf of several hundred Uber employees and other prominent investors who will suffer billions of dollars in damages (exclusive of penalties and punitive damages) if you support the covert effort, apparently led by Benchmark, to strip Class B Common stock holders of their voting rights.
Wouldn't ever walk into their office as a founder after this. And repeatedly advised other founders against it.
Travis did a great job of building Uber, but he's become a massive public liability.
He's getting sued by Google for apparently blatantly stealing billions in IP. Maybe he's innocent, but the optics are bad.
He's going to be the public figure on which we will scorn for all those scandals.
He's tainted pretty badly - rightly or wrongly - and it just will not go away.
He's a little toxic to have around, especially when the company needs to wind up to an IPO - they need the opposite of 'scandals'.
I'm weary that there's really nobody that can ever replace a founder, but hopefully they've found a good CEO.
Travis's dragging out this board fight is just jeopardizing the company. He owns 10%, not 100%.
I don't know if Benchmark are good guys or bad guys in the grand scheme of things, but their position of wanting to Travis to move on is grounded and reasonable I think.