Will Uber's Mistakes Delay the IPO?

Uber's mistakes in 2017 led to the ouster of the company's founder and CEO Travis Kalanick.

In early September, ride-hailing platform Uber brought on a new chief executive officer, Dara Khosrowshahi, to replace Kalanick and restore investor confidence in the company.

The new CEO made it immediately known he wanted the company to go public between 2019 and 2021, according to an Aug. 30, 2017, CNBC report.

uber's mistakesBut even with a new CEO, Uber's controversies under Kalanick could still delay the IPO...

Uber's Mistakes in 2017 Piled Up

Uber has been in the news throughout 2017 because of missteps and scandals.

Under Kalanick's watch, Uber was accused of everything from promoting a culture of sexual harassment to deceiving regulators.

On Feb. 19, a former engineer for the company, Susan Fowler, alleged in a blog post that she was sexually harassed. On Feb. 23, Alphabet Inc. (Nasdaq: GOOGL) sued Uber for intellectual property theft.

Then on Feb. 27, Kalanick asked former Uber Senior Vice President of Engineering Amit Singhal to step down amid emerging sexual harassment allegations from when he formerly worked at Google.

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Who Is Dara Khosrowshahi?

That was all just in February.

March was another notably bad month for the ride-hailing service. Uber was accused of deceiving authorities in areas it wasn't allowed to operate in by using a tool called "Greyball." The tool allowed Uber to circumvent law enforcement efforts to track the company.

On top of that, both Uber's president and vice president of product and growth resigned in March.

And the bad news continued right before Uber hired Khosrowshahi as CEO at the end of August.

Uber had knowingly leased unsafe cars to its drivers in Singapore, according to an Aug. 4 NPR report.

One of the cars caught on fire and melted the interior while a driver was in the car. Fortunately, the driver was unharmed.

But overcoming scandals isn't the only roadblock in the way of the Uber IPO. Khosrowshahi wants to make the company profitable before the Uber IPO date.

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He has a long way to go, as the company lost $2.8 billion in 2016.

And Uber is on track to lose $2.7 billion in 2017.

But if Khosrowshahi can lead Uber past its scandals and make it profitable, should you buy Uber stock?

Here's the answer, plus a way to make money before the Uber IPO date that you can't afford to miss...

What You Need to Know Before Buying Uber Stock

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Money Morning does not recommend buying Uber stock.

"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," said Money Morning Director of Tech & Venture Capital Research Michael A. Robinson.

However, we do have a way to profit from Uber without having to own a single share of Uber stock...

Uber operates in 570 cities worldwide, which means it has a lot of office space rental needs.

That creates a backdoor strategy of making money from the ride-hailing app without owning a single share of Uber stock. This strategy involves a lot less risk because you'll avoid the volatile price swings that accompany public offerings.

Through extensive research, we found a real estate investment trust (REIT) that leases space to Uber.

In 2013, Uber signed a lease with Hudson Pacific Properties Inc. (NYSE: HPP) for an 88,134-square-foot space in San Francisco.

The ride-hailing app grew so fast that it leased another 130,434 square feet in 2014 at the San Francisco location, according to BizJournals.com.

Uber is also locked into that lease until 2024, which means seven more years of revenue from just one business.

According to FactSet, Uber accounts for 3.2% of Hudson Pacific's revenue. Tech juggernaut Google also rents space from Hudson, accounting for 4% of HPP's revenue.

And that solid revenue stream has analysts bullish on HPP stock...

Of the analysts who cover HPP, 67% recommend it as a "Buy" or "Overweight." And on Nov. 3, brokerage firm D.A. Davidson & Co. placed a "Buy" rating on HPP with a one-year price target of $43.00.

From yesterday's opening price of $33.96 per share, that's a potential profit of 26.61%.

On top of that, HPP also pays its shareholders a dividend of $0.25, which is a yield of 2.89%.

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