Latest / The Curve / TCW55: Green flags for Uber, red flags for Amazon, and no more flowers for Vic.

Transcript

TCW55: Green flags for Uber, red flags for Amazon, and no more flowers for Vic. · The Curve

• 0:00
  Hi and welcome to the Curve Weekly. The podcast that keeps you up to date with all the money,
• 0:06
  business and stock market tea. Everyone should experience for us at least once in their lives
• 0:10
  and Annie shouldn't miss out just because she can't afford it. Help me, I'm poor.
• 0:15
  Well this is our third podcast recording. We have another meeting in about half an hour.
• 0:19
  This is going to be a really quick episode. Yes, sorry everyone. God, thank you.
• 0:23
  Sorry people to see. However, do you know what I did want to just quickly share at the start
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  of this because I thought it was so cute. Okay, we got 30 seconds off at me. Could you please
• 0:31
  talk about your Valentine's Day and the note that you got from Flower Man? Yes, as long as you
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  talk about your Valentine's that you got, I'm happy. That's not fair. You're in a relationship,
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  you know? Mine's temperamental. Temperamental? No, just temperamental, you know. Yes, so
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  the less his heart, Flower Man sends me flowers, naturally, on Valentine's Day because he's
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  Flower Man. But the note was the cutest. And the note said, breaking news, Flower Man retires.
• 1:05
  He's like, thanks for encouraging me to a loud budget this year. My loud budgeting is no more flowers.
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  And I was like, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, I have to
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  approve the loud budgeting thank you. But the other cutest thing ever was that her other loud
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  budgeting was not getting her nails done because that loves the manicure, but isn't allowed to
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  spend money on her. And he went and got about to get a nail style. Yes, it was very cute.
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  I, yeah, he listens, which is great. Also, sorry, but they did a Zoom day because he's in London
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  at the moment. And they had like wine and food. Okay. I'm so cute.
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  Okay, your turn. No, no, no, excuse me. Oh, I'm sorry. Come on. Okay. Give a gallop break.
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  I got a delicious salmon bagel in the morning. So I've got flowers too. Yeah, continue.
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  Oh, gosh, we love, we love. Anyway, we have had actually some, I actually laughed out loud when I
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  read this. We've had some pretty funny news, although me and Sophie are very different since
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  the humour, but that's okay, especially when it comes to finances. No, but it was quite a bit
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  of a blowout. So you know, the company lift. Uber's needed it. Yeah, we don't have it in New Zealand,
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  but it is in lots of other countries around the world. So they had, they announced their financial
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  result. There's a lot of people watching your financial result. It's a big deal for the company.
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  You know, sometimes it's really good. Sometimes it's really bad. Anyway, you put out the press release
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  and then you follow it up with a call to investors and anyone can dial in and listen. And so what
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  happened with lift is they put a decimal point in the wrong place, which made their result seem
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  absolutely amazing. And it was to do with their profit. They put the decimal point in the wrong
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  place. And the shares went up 60 percent, 60 in one day, because everyone thought they were going
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  to do way better than they actually did. And then they had to put out another release saying,
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  oh, no, no, no, sorry. Oh, yeah. So they see it like the Oscars. It's like having to give someone
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  a medal and then being like, actually, you don't get that. It's honestly like, but also a mess of
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  move like that with a share price. Like you, you've got someone's head is rolling. Some probably
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  some poor newbie at the company. Yeah, gosh, please, they're little hearts. But anyway,
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  so it was to do with their their profit margins. So your margin is effectively the percentage that
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  you have left over as profit after you've taken out your expenses. So you've got revenue minus
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  your expenses gives you a profit. And then you put that back on top of your revenue as a calculation.
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  Anyway, so they were saying that their margin was going to expand by five percent, but it was
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  actually supposed to be 0.5%. So they were saying they were going to be way more profitable than what
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  they actually were. So they were saying that their profit was going to be 300 million in the future,
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  not 100 million. So yeah, a big, big, big stuff up. But it'll be interesting to see what happens
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  because there could be people that bought shares when they were up, say 60% and then now they're
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  fallen. So there could be a lot of lawsuits. There could be lawsuits. There could be a lot of
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  repercussions. Yeah, because you say I wouldn't have bought them because you gave up false information.
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  You gave false information. And now my eye bought shares when they were up 60% and now they're fallen.
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  Oh, shit. That's on you. So there could be a lot of repercussions from that, but also just kind
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  of a bit embarrassing. It was it was it was the the lady who's a seat who's the CFO of the company.
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  She had to come out and say sorry, what we released to the market was actually incorrect.
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  But in that time, like markets move so quickly and that's a pretty imagine all the poor thing.
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  It's like pie faced, you know, just hit me in the face with it. Oh, no. But ultimately,
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  it's her responsibility because she's the most senior to this person. Yeah, which is quite
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  unkind of gutted to hear that. I know. Yeah, I haven't never seen such a major effort.
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  Photo part. Yeah. Yeah. Yeah. Yeah. Anyway. But a lift, they also announced that they're laying off
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  about a thousand employees as well. So they're going to pay for their legal fees. Yeah.
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  Probably probably about 2000 people are losing their job now. They have been cutting costs
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  to try and make themselves more profitable. And we're saying that with Uber as well is and there's
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  a lot of strikes going on at the moment, actually, with Uber, Lyft, Deliveroo, all those kind of
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  body, call them digital taxis or delivery people. Yeah. Deliverable. They're all going on a lot of
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  them are going on strike due to pay and working conditions. So because you're not you're not
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  technically an employee if you're an over driver, you're a contractor and therefore you don't
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  get the perks, but then you work a certain hour. So there's lots of it would be pretty
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  shit to be like on a bike, delivering a pizza, going up a hill, delivering it and then then
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  being like, it's cold. You're like, yeah, well, actually, I know. It's funny when it's raining and
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  I'm like, I'm going to order Uber Eats. And then the guy comes to the door, absolutely
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  dreamt. You know, and I'm just like, I'm so sorry. But thank you. You also won't be doing that
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  this year. You won't have anything to feel bad about since you're not going to be ordering
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  any Uber Eats. Yes. I know. I actually did it the other night. My sister was like, should
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  you Uber Eats? I was like, no, no, I'm going to have eggs on toast. Do you know what's pretty funny
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  is another one of Vixelard budgeting is the coffee like the takeaway coffee and she's been
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  caught out twice publicly about people being like, excuse me, there's coffee or drinking in the
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  cafe. Does this count as one of your takeaways? She's like, oh, yeah. I was like, I kind of have to,
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  yeah, like, this is the whole point. Is that I'm going to be held enough to follow through?
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  Yeah. And then I went to another place. I was in within my two takeaway limit. But I went to this
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  other place and she was like, the bristers are like, I love your podcast. I was like, oh gosh,
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  okay. Good to know. Good to know. Oh my god. While I remember, we had another shout out to do.
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  Someone messaged us, hold on. I've got to read this. Hey, good girls. Can I be cheeky and ask for
• 7:34
  a shout out on the pod? He, I'm tuning in from hospital. I was sorry, it's actually not funny,
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  by the way. I was hit by a motorbike while I was crossing the road and angel yesterday.
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  It's in the UK. Oh, yeah, sorry. And London. And I was like, oh my god, are you okay? What happened?
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  And she was like, I was just trying to, I was just trying to get to reform up bodies.
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  Can't let your guard down in London. And then she was like, lol, well, I was actually wearing a
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  white Maggie Maryland puffer jacket. And it's completely unscathed, which is crazy considering I
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  was not very hard. My upper body is also completely uninjured. Anyway, she was, anyway,
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  moral of the story, Maggie Maryland piece was clearly a worthwhile investment.
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  Oh, my god, I love that. Isn't that good? And I was like, do you know what? That's actually
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  amazing. Firstly, that you sent us a message telling us. Secondly, that, you know, you're okay.
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  She sent photos of her injury. She's like, actually, she's fine. Like, she'll be fine.
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  But then anyway, I text Maggie. And I was like, hey, like, we got this message from this girl,
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  Meg, blah, blah, blah, blah. You know, she was like, oh, my god, totally. I'll give her one of
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  our cute little singlets, like put her in touch with our team. And I was like, oh,
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  so she's getting a free Maggie Maryland singer. Do you know what? We're going to get so many
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  messages now. People being like, hey, I tripped over and made Gucci shoes. Can I?
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  We're like, no, no, no, no, we don't have that kind of pulling power. Sorry, sorry.
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  We got a hug. Would that be though if we did? No, no, you're one day.
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  Look at you, paying it forward girl. Love it, love it, love it. Sorry, back to the finance
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  news. Also, Meg, hope you're okay. Yes, hope you're okay. I thought you were going to have
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  some financial angle to that like. And she was so glad she had insurance, so she could fix a leg.
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  Oh, no, sorry. But I thought that the investment piece on the Maggie Maryland is still a good
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  learner, you know, by investment clothes. By quality. Yeah. Yeah. Okay. Anyway, speaking of
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  Uber's and Lyft's Uber is actually their share prices hit a record high. So they're now at $80
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  a share and they were at $40 a share back in October. So if you'd invested in Uber and October,
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  you would have doubled your money, which is only a few months ago. It's crazy. Wow.
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  Do you know the great thing about that as well? I think it's a good example of when you invest
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  like, for example, if it was Tesla or something that's done super, super, super well and you didn't
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  invest, it's just also thinking there's always opportunities, not only within that same
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  opportunity, i.e. company, but also outside of it. Like, if you really wanted to invest in,
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  I don't know, oh, what's a company, pineapple.com, which is not a company, but say you wanted to
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  invest in pineapple.com, it doubles its shares and you're like, damn, I should have done that.
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  You even know, because two weeks later, a week later, it could still do really well.
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  Like, there's still opportunities within the same company as well as externally. Like, you would
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  think if you've invested in Uber or you haven't up until this point that you'd missed it.
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  Totally. You're like, everyone uses Uber.
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  Everyone uses Uber Eats and like, you would think that, yeah, there's not any growth in the share price,
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  but they've actually just made the reason why the share price has done so well is that they've made
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  their first profit, their first annual profit for the year since they've been a public company
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  and they've listed in 2019. So now, Uber is profitable, which is great, kind of gives people a bit more,
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  a bit more confidence in the outlook of the business, because if you're constantly making
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  a loss, investors don't really like it. It's good in the first couple of years, if you're
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  accelerating and growing and you're putting money back into the business, but eventually,
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  shareholders want to see a profit, because that's what you pay.
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  Dividends from...
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  But it also proves that your business model is actually going to work.
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  It's sustainable, exactly. You can't sustain losses after losses after losses.
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  You need to be profitable to survive.
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  Yeah, so it's kind of...
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  You know what I think is an interesting business learning, though, and something I didn't
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  had really thought about until you shared Uber's news. You also can still be, I think my thoughts
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  on business were you're not a successful business unless you're instantly making money,
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  which is not true. Sometimes you do need external capital to grow. Sometimes it takes a while to
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  get the recipe right, or you know, be able to pay off your debts and blah, blah, blah. It doesn't
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  mean just if you're making a loss that you're... it's not a good idea, it's not going to be successful.
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  And it's kind of like with the curve, it's like, if you...
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  If you were going to be like, where in so much debt?
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  No, I was like, are we?
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  Let's do it well this afternoon.
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  No, I mean, if you're in a real sweet spot of shit, let's just run. We've got so much growth.
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  We've got so many women we want to talk to. We want to reach so many women globally,
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  you know, with Uber, they're like, let's just grow. We've got such a good opportunity. Let's
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  keep reinvesting back into the business. Let's keep adding sales staff, expenses.
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  It's like, keep adding costs so that we can grow really quickly.
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  And then once we've got scale, that's when we can start thinking about profit.
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  And so that's how a lot of these companies, these tech companies think.
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  And yes, just because your public company doesn't mean that you are profitable,
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  there's still going to be people that invest in you because they believe the story,
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  and they can see the opportunity, and they can see that you will be profitable in time.
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  But right now, there's just such a big opportunity. You just need to run, just run as fast as you can.
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  And in order to run, that takes money. So that's kind of, I guess, where Uber is coming from.
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  It has been, but now they are profitable. They also announce they're doing a $7 billion
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  share buyback. And this is the $7 billion of their own shares.
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  Yes. Yeah. So, big green flag for Uber. Yes. So this is 88 million shares.
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  So it's only about less than 5% of the shares that Uber offers to the public.
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  So it's not, not a huge amount, but it's still a lot, like $7 billion is a lot.
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  And we say this is a green flag because companies don't buy back their own shares if they think
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  the future doesn't look good. So it's a really good sign.
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  If you're like, oh shit, things are dying. You're not going to go and buy your own shares.
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  And it's kind of like, you know what, we're in this with you. We're going to buy shares too,
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  because we think it's really good. We're going to invest alongside you.
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  There's a whole lot of reasons. This is a really positive announcement from the company.
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  So amazing. Yeah. And just for context, they made $2 billion profit last year versus
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  lift, which made a $300 million loss. So it kind of looks like Uber's winning this race.
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  Oh yeah. At the moment. Yes. And then quickly we had Amazon as well. So two weeks ago actually,
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  Amazon CEO Jeff Bezos said that he was going to sell up to 50 million Amazon shares.
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  So that's about $9 billion. And so he has his own stock of his own stock.
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  Yes. So that's like the opposite of what Uber's doing.
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  Yes. Yeah. So he owns 900 million shares of Amazon and he's selling 50 million.
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  So tiny percentage. He probably wants a new boat.
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  Or like, exact new shoes or something. Yeah.
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  But he is selling about $9 billion. And last week he sold $4 billion. So they kind of stagger
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  it so they don't really impact the movement of the share price a lot. So he's done half of that.
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  So he's he's made $4 billion last week just by selling stock. Like it's crazy.
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  But everyone's kind of trying to figure out the reason. And it seems like it's due to text.
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  So he's trying to he's moving from surveyed not tax evade, but he's moving from Seattle to Miami.
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  And he's relocating. They've got better tax payment percentages in Miami than they do in in
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  Washington. So quite interesting. I could say that he's even worried about how much tax he's
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  getting. But this this could be a lot hundreds of millions of dollars. Like that's that's why.
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  And yeah, I mean, he the share when he first bought his shares, well, when he started Amazon,
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  they were zero. And now there were billions and billions of dollars. The tax bill on that
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  would be absolutely massive. So moving to a state where the tax rate is lower would have
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  huge impacts for him for someone selling billions of dollars and stock. Like it's crazy.
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  There's a lot of people that live in random parts of the world because they don't get tax there.
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  Or like there's apparently some island off of England. I don't know. But I met this guy once
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  who said he lived there with his family. And I was like, oh, yeah, what do you do, blah, blah?
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  I was like, what a random place to live. And then I looked into it afterwards. And it's because
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  he doesn't have to pay tax there. So he's raking it in and they're not paying tax.
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  If you could pay 10% tax versus 30, you know, you do that for a number of years. That's a huge
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  amount of money that is coming straight to you or that you can invest or yeah, it does make
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  a huge difference. Especially if you're earning a lot like Jeff Bezos, you know, you can have a huge
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  huge impact. So yeah, that's kind of why he's doing that. But yes, Red Flag is when CEO or founder
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  sells their shares. But you have to look at it in relation to the size that he's selling. He's
• 16:56
  selling less than, I think it's less than 5%. Hey, we've got to go. We've got to meet him.
• 17:02
  We've got to go. Sorry. But that was good. I loved that. Yeah. Really helpful.
• 17:06
  Sure. Okay. Check the meeting. Bye. Bye.
• 17:10
  Thank you so much for listening to the Curve Weekly. Make sure you hit the subscribe button
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  because it really helps other people find your cute little podcast. And we hope you have a good
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  week and see you next Monday. Bye. Bye. See you next Tuesday. Wow.
• 17:41
  See you next Tuesday. I mean Monday.