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by mdorazio
2656 days ago
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You and I must have had different Investments professors. If you invest in a stock and it decreases in value, you lost money. You might get that money back if it goes up, but it is absolutely referred to as losing money. People just like to play mental games and say things like "it's only a paper loss" or use the "unrealized loss" term which is for accounting purposes, but it's a loss regardless. If you don't believe me, take your rent payment and put it in a stock, then if it drops tell your landlord that you're not short the money - they just have to wait a while because it's an investment. Or put another way, had you not bought the stock before it went down, you could have used the same amount of money to buy more of it at the lower price point - i.e. you lost potential money even if it goes back up. I believe the point of the parent post is that the entire business model of Uber is based on losing money on a unit basis to sustain the market. This is very different than companies like Amazon that lost money due to OpEx on growing the business in a sustainable way. The Amazon equivalent of Uber would be if Amazon paid for 20% of every item ordered out of its own cash balance. I agree that it might still turn out great for Uber in the end if various market forces align, but 1) I'm having a hard time thinking of a company outside of the VC-funded tech scene that could run Uber's financial games without going bankrupt, and 2) I personally think it's important to ask if the money going to keep Uber afloat is really best allocated there. |
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