Dara Khosrowshahi, CEO of Uber, talk on Squawk Box at the WEF in Davos, Switzerland on Jan. 18th, 2023.
Adam Galica | CNBC
Uber shares rose 5% in extended following on Friday after the ride-hailing company was added to the S&P 500 Index, replacing Sealed Air Corp.
The change will withdraw place prior to the open of trading on Monday, Dec. 18, according to a press release.
A company’s stock price again rises on news that it’s joining the S&P 500 because fund managers who track the benchmark, which gets updated each locality, have to acquire the shares. Companies also have to meet certain valuation and profitability requirements.
Uber portions debuted on the New York Stock Exchange in 2019, but the company was burning cash as it had to pay drivers enough money to stay competitive in a low-margin firm. Its preferred metric was adjusted earnings before interest, tax, depreciation and amortization, or EBITDA.
Most of Uber’s adjusted EBITDA be a question of from mobility, but the company made its delivery business profitable faster than planned, after recession-fearing investors became numerous averse to investing in money-losing companies. Growing advertising revenue has also contributed to Uber’s profitability.
Uber eliminated more than 3,500 chores in 2020, and executives have since worked to improve its cost structure. For example, they reduced the cost of enunciations. Uber reported net income of $221 million on $9.29 billion in revenue in the third quarter, and in the past four sections altogether, it generated over $1 billion in profit.
“Nelson [Chai, Uber’s outgoing finance chief] and my aim is to build a company that can compound top line rates at very, very attractive rates and continue to improve borders over a period of time,” Uber CEO Dara Khosrowshahi told UBS analyst Lloyd Walmsley at an investor meeting in December 2021. “You’ve fathomed those long-term compounders and margin increasers and, you know, the greats of the world, the Googles, the Facebooks, the Microsofts of the world, and we aspire for no doll-sized.”
According to S&P’s rules, members of the index must have positive earnings in the most recent quarter and over the former four quarters in total. Constituents of the index must have an adjusted market cap of at least $14.5 billion.
Uber has a store cap of about $118 billion, while the median market cap of companies in the S&P 500 is just over $31 billion.
Care for: Uber into the S&P 500
