Final Word from Wednesday, April 19, 2017

Uber is currently valued at about $70bn, and if its IPO is successful at some point in the future, valuations go to $100bn or higher. Yet Uber is just a run-of-the-mill taxi-dispatching service with a decent app and lots of Wall Street hype. Its business model in the CR and other markets, when boiled down to its essence, is to violate the law and to hope it can get away with it at least until it can go public. Warren Buffet said last year that he would pass on the IPO, but he still compared Uber to Federal Express and Amazon. Even he fell for the hype. FedEx and Amazon were so innovative because they centralized costs and made deliveries to customers more efficient. Uber's business model is to have gypsy cabs deliver the customers and to take a cut. Brno city hall didn't like the model and won an injunction against Uber in court yesterday. It probably didn't even realize that it was defeating Goldman Sachs, Morgan Stanley, Fidelity Investments and other value seekers. [Czech Republic initial public offering]

Glossary of difficult words

IPO - initial public offering (on a stock exchange);

run-of-the-mill - ordinary;

hype - extravagant or intensive publicity or promotion;

to boil down to - to amount to; to be essentially a matter of;

essence - the intrinsic nature or indispensable quality of something;

to go public - to sell a private company on a stock exchange;

gypsy cab - an illegal taxi;

a cut - a percentage;

value seeker - an investor looking for unseen value in a stock or other opportunity.

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