A filing by Uber Technologies quantified the accumulated deficit of $929 million generated by Postmates through June 30th. The company lost $32 million in the second quarter, presumably a profitable period given the extent of COVID-related ordering from restaurants. Uber is nevertheless confident that the acquisition will generate synergies equivalent to $200 million one year after closing.
A serious overhang will be the result of California Proposition #22. If passed, Postmates- Uber drivers would be regarded as employees eligible for fringe benefits. According to an article by Laura Forman in the October 5th edition of The Wall Street Journal, there is no certainty as to the outcome of the November 3rd ballot.
Uber Technologies (UBER) has traded during the past 52-weeks over a range of $13.71 to $41.86 with a 50-day moving average of $34.28. Market capitalization is $65.1 billion with three percent of shares outstanding short. Fundamentals are horrendous with a return on assets of (10.0) percent and a return on equity of (52.7) percent. Operating margin over the trailing 12-months is (34.8) percent and the profit margin (51.0) percent. The company carries $9.6 billion in total debt.