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The new Uber CEO could be chosen by September 2017, according to an Aug. 1 Business Insider report. And an Uber IPO may not be far behind…
Former CEO Travis Kalanick wanted to delay an Uber IPO as long as possible, but the new CEO may need to take the company public soon to raise money and expand the business because of growing competition.
Recent Uber scandals, ranging from company-wide sexual harassment to accusations of intellectual property theft, have cost Uber customers. Because Uber isn't profitable yet, the ride-hailing app can't afford to lose any of its users.
According to research firm Second Measure, Uber's U.S. market share fell from 84% at the beginning of 2017 to 77% in May. Rival Lyft has benefited the most, becoming an alternative transportation source for former Uber customers turned off by how Kalanick ran the company.
According to PYMNTS.com, Lyft increased its bookings by 135% year over year (YoY) from April 2016 to April 2017.
Here's how Lyft could push Uber to a public offering sooner than expected and how you can profit without ever buying a share of Uber stock…
New Uber CEO Can't Afford to Delay IPO
While Uber has dealt with multiple scandals recently – we can count more than seven in 2017 alone – Lyft has built strategic partnerships that could increase long-term revenue growth.
In June, Jaguar Land Rover announced it was investing $25 million in Lyft to support its autonomous and connected vehicle programs.
Just a month earlier, Waymo, the self-driving car company of Alphabet Inc. (Nasdaq: GOOGL), announced in May it was partnering with Lyft to develop new autonomous vehicle technologies.
Alphabet's Waymo Teams Up with Lyft in Threat to Uber
And just yesterday (Aug. 1, 2017), Lyft announced a partnership with Amtrak.
Amtrak app users will be able to request a ride from a Lyft driver. This is supposed to making scheduling the beginning and end of a trip easier, and it's a great way for Lyft to increase bookings.
Lyft's growth should concern the new Uber CEO, which is why we're speculating an Uber IPO date will happen sooner rather than later. Uber will need more money for marketing to attract new customers and more drivers.
The good news for Uber is IPO hype can attract retail investors and provide a lot of new capital to use to grow its business. For example, Snap Inc. (NYSE: SNAP) made $3.4 billion in its IPO on March 1, 2017, even though the company had yet to turn a profit.
And because Uber has a valuation of over $70 million – more than triple Snap's pre-IPO valuation of $18 million – investors are still eager to own a share of the company. After all, despite its scandals, Uber still controls over 75% of the ride-share market.
But even though there's a lot of hype surrounding the possible Uber IPO, we aren't recommending Uber stock.
Here at Money Morning, we know retail investors aren't getting rich from IPOs.
"I generally tell retail investors to avoid buying an IPO at the open because the insiders have already made all the money available at the debut," Money Morning Director of Technology & Venture Capital Research Michael A. Robinson told me.
Instead, we have a backdoor way to profit from Uber without ever owning Uber stock.
You see, Uber is already locked into a long-term contract with a company whose stock is already publicly traded. That means no matter how Uber stock performs, this company is still guaranteed to make money off Uber.
You don't even have to wait for Uber to go public to make a profit.
Over the next 12 months, financial service company D.A. Davidson & Co. projects the stock price for this backdoor company will climb 31.61%. On top of that, this company also pays a dividend of $0.25, for a yield of 3.07%.
This Is Creating Billionaires: This technology is projected to grow 63,000% and create $7 trillion in new wealth. Will you be able to capitalize on these windfall profits? Read more…
Here's the safest way to profit from Uber without owning a single share of Uber stock…