Many would-be investors start their journey off by desiring a nice, solid capital gain. They forget all about regular income and longevity. Most only see the surface. For example, many US investors thought Uber Tech would be a great buy, based on future technology plans and news hype. This is like thinking the tip of the iceberg is the part the captain needs to watch out for!
In 2019, Uber Technologies Inc’s initial public offering (IPO) launched at US$45, but ended the day down, at US$41.57. [ix] It is now $30.17 and has zero dividend yield. Time will tell whether Uber Tech can find a profitable division to outweigh other large, loss-making ones. It seems the traders did not believe it is a fantastic bet after all.
Uber Technologies is losing $1 billion each year as it jumps from one industry to the next. This loss happened despite its 2013 to 2017 operating practices of pillaging contractors from competitors and ignoring local laws. Though currently making this yearly loss, in one documentary a financial expert said that Uber (to survive) needs to be valued at $90 Billion. [x] Certainly, no company can last for long making a continual loss.
Remember the concept of normative influence? Because some of us believe other investors have the answer, we buy into widespread hype. Not so my high-school-aged daughter: straight away she understood that Uber are putting out fancy videos on new technologies (flying cars) to build the hype, not because it will prove a winning play. When someone is guided by logic and foresight rather than emotion, it takes little time to discern the ‘real story’ behind the news.
You can bring this real-world view to any investment offering, particularly that of cybercurrencies and new technologies. Initial Coin Offerings (ICOs) do not let you have an ownership or shareholder status, so in effect you do not have any claim to future profits. ICOs have been used to raise hundreds of millions of dollars for blockchain-related projects, often with limited information about their goals. Further, when buying a crypto coin or token, you are not buying an income stream, to state the obvious.
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