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Published Aug 8, 2022

Prof G Markets: Uber and Airbnb Earnings, Apple’s Debt

Scott Galloway delves into Uber's and Airbnb's earnings, dissecting their financial narratives and the interplay of cash flow with market expectations, while critiquing the dependency of growth companies on storytelling over fundamentals. He also explores Apple’s strategic debt management, offering insights into how leveraging credit can enhance financial stability.
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Episode Highlights

  • Uber Earnings

    Uber's recent earnings report reveals a complex financial landscape. highlights Uber's positive cash flow, a significant achievement for a company historically plagued by cash flow issues. Despite this, Uber posted a net loss of $2.6 billion, primarily due to stock-based compensation and write-downs on investments 1.

    Companies don't go out of business because they're unprofitable. They go out of business because they run out of cash.

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    Scott emphasizes the importance of cash flow as a forward-looking indicator, noting that 82% of small businesses fail due to cash flow problems 2.

       

    Airbnb Insights

    Airbnb's financial performance also presents a nuanced picture. The company exceeded expectations in both revenue and earnings, yet its stock initially fell by 7% due to unmet expectations for nights booked 2. Scott, a shareholder in Airbnb, notes the company's impressive pricing power, particularly in urban markets like Manhattan, where Airbnb effectively acts as the largest apartment owner 3.

    Stock prices are really driven by expectations.

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    He explains that the narrative around a company can significantly influence its stock valuation, often more than the actual numbers 3.

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