The Next FANGs

[Gregmal]

39 minutes ago, Sweet said:

I’d imagine they have little to no pricing power.  I need convenience or cheap when I get a cab, takes me from A to B, not looking an experience and not wanting to pay a premium.
 

It’s a low margin business that needs scale.  It has brand recognition and ‘Uber’ has almost become synonymous with taxis ordered from your phone.

 

Is that enough of a moat?  Probably.

 

Whilst it has characteristics that are FANNG like, I’m not convinced it’s many bagger like AMZN, GOOG etc, maybe just a multi-bagger.

 

Price is important, and right now I wouldn’t feel compelled enough to buy.

 

 

The following is true of any company if you go back in time. Hence many baggers are rare. The odds of Amazon becoming more than just a bookstore were good but the odds of it becoming what it is today were tiny. You wanna look for legs and webs that branch out into potential opportunity. Couple optionality with good management and you have a chance.
 

Other than that, we re all just guessing. There is a good bit of pattern recognition. For instance, every company with obvious growth potential people decry as “expensive”. Any company revolutionizing a new arena and capturing massive market share is rare. Typically you want something that is polarizing. Short interest is also typically a good sign. How many shorted Amazon for ages? There’s no science to it. 
 

UBER has a huge advantage because it runs a capital intensive business in a capital lite way. Even self driving will have to deal with car upkeep costs. Uber just puts this on the driver. They have the network, and no one person or group really matters. All the drivers are interchangeable. They have ridiculous data. They also have brand recognition with a future generation who knows nothing but their iPhones and androids. You think those fuckers are googling and shopping price for local taxis service? Nope. All the hallmarks are there for a huge winner. Could definitely see a half trillion or even trillion dollar valuation a decade from now. If not, what’s the downside? Pretty negligible if you size it right.

Edited May 27, 2022 by Gregmal