Why Uber Technologies Inc (NYSE: UBER) stock crashed?

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Uber Technologies Inc (NYSE: UBER) stock fell over 9.9% on 6th November, 2019 (Source: Google finance) after the company reported the $1.16 billion of net losses for the third quarter of FY 19, including $401 million in stock-based compensation. This has increased from $986 million a year earlier. The loss is driven by surge in the cost (about 33%) of the company to $4.92 billion. Though, the company has posted better than expected results for the third quarter of FY 19. Uber has generated unrestricted cash and cash equivalents of $12.7 billion, compared to $0.9 billion in the second quarter of 2019. The company has secured more cash through selling $1.2 billion of senior unsecured notes and closing a $1 billion investment in ATG. Uber is currentlu facing regulatory challenges to its business model and the investors so far appear are not happy by the company’s push to diversify.

UBER in the third quarter of FY 19 has reported the adjusted loss per share of 68 cents, beating the analysts’ estimates for the adjusted loss per share of 81 cents, according to Refinitiv estimates. The company had reported the adjusted revenue growth of about 30 percent to $3.81 billion in the third quarter of FY 19, beating the analysts’ estimates for revenue of $3.69 billion. During the quarter, the Revenue from Uber’s ride-hailing business increased about 19% to $2.90 billion while sales from its Uber Eats segment rose 64% to $645 million. The revenue from Uber Freight rose 78% year over year, to $218 million for the quarter.

Further, Uber has posted lower than expected estimates for gross bookings across its services, as it reported $16.47 billion (increased 29.4%) compared to estimates of $16.7 billion, according to Refinitiv. Uber has posted 103 million Monthly Active Platform Customers (MPACs) while the analysts had expected MPACs to reach 104 million, according to Refinitiv. The company’s take rate, beaten analyst’s estimates of 20.2%, as it came in at 21.5%.

Uber has raised guidance for its full year 2019, as it expects adjusted net revenue to rise in the fourth quarter. The company slashed its guidance by $250 million for an adjusted EBITDA loss, and it now expects an adjusted EBITDA loss to be in the range of $2.8 billion to $2.9 billion for the year

Meanwhile, Uber intends to acquire a majority stake in Cornershop, a leading provider of online grocery delivery in Chile, Mexico, Peru and Toronto. The deal is expected to close in the first half of 2020.

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