How come they can lose more money than they raised?
If that's because of revenue, why is that being accounted as a loss?
Is it because they spend it all? No real profits?
If that's because of revenue, why is that being accounted as a loss?
Is it because they spend it all? No real profits?
As someone else posted, it is possible that, in addition to equity financing (the "amount raised" number), the company also received debt financing, and they've spent most of that, but I don't think that can explain everything, e.g. the huge delta in Teladoc Health only raising $170 million but having $11.2 billion in cumulative losses.
Doing a little searching, it looks like Teladoc recently took a $6.6 billion goodwill impairment on its acquisition of Livongo in 2020 that it did for $18.5 billion. The original acquisition was for "Livongo shares will be exchanged for 0.5920 shares of Teladoc plus cash of $11.33 each consideration per share." So if a lot of the merger deal was done with inflated Teladoc stock, and then that stock fell, it would be considered a loss in a particular quarter, but I feel like it's weird to call the non-cash charge part of its "cumulative losses".
In any case, the numbers are at least "funny" in the sense that they're not comparing apples to apples (or, more accurately, "cash to cash").
It would make sense to not include debt raises, because as the article points out, those debt raises need to be financed. Still, not at all a useful comparison without more detail.
When you issue stock comp, you are trading dilution for money, just like you are when raising from VCs or doing an IPO. The money is just spent on paying an employee immediately instead of sitting in the corporate treasury for a while.
If you include the spending part of the stock comp as a “loss”, but don’t include the creation of that stock as a “raise”, you end up with these nonsensical results.
I do not know.
I guess to pay super high salaries.
Their product isn't some software, and they're not making money by selling software or a software-based service [1], so they're not a software company.
They're selling taxi rides, the fulfillment of which is outsourced to semi-independent contractors. Therefore, they're a taxi company.
[1] Yes, they have an app – who doesn't, today – but clients aren't paying for using the app, they're paying for the service arranged via the app.
Example, Uber still makes revenue from its rides, just not enough for a profit and in this case funds raised would be making up the difference.
1. They may have revenue which is adding to total cash pile; and 2. They may have taken on additional debt
Maybe obvious, but probably worth repeating is that raising capital does not raise debt for your company (i.e. you're selling off a piece of your company, not taking on debt which you have to repay). I'm assuming that the "Funds raised" column is the amount they've taken in venture funding, and not debt. If it does include debt, you can ignore point #2.
The difference is debt they've taken on.