This morning as the markets rally, shares of Lyft are up 3% while Uber shares are up 6%.

Why is Uber so far ahead of Lyft, its domestic ride-hailing rival that is experiencing the very same financial effects? It appears that financiers are heartened that Uber has actually closed its Postmates acquisition after both companies danced around each other for a long time, causing all sorts of leakages that wound up being not coming to life.


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This discusses why Uber investors are delighted about Uber’s < a class="crunchbase-link"href="https://crunchbase.com/organization/postmates"target="_ blank"data-type="company" data-entity =”postmates”> Postmates buy; what about the smaller sized company is making Uber shares so resilient? Let’s take a walk through the numbers this morning.

If we reexamine Uber Consumes’ recent development, contrast it to Ubers Rides ‘own development, mix in Eats’success improvements together with Postmates ‘own financial results, we can start to see why public investors

might be heartened by the offer. Afterward, we’ll toss in a note about how Postmates might supply Uber some narrative ammo heading into profits. This workout should be fun, and a good break from our recent IPO protection. Let’s get into the numbers.

Growth, losses

In case you are behind, Uber is purchasing Postmates for $2.65 billion in an all-cash offer. Uber approximated that it would release around 84 million shares to spend for the transaction. At its share rate as of the time of writing, the deal is worth $2.72 billion at Uber’s newer share rate. For reference, that price tag has to do with 4.8% of Uber’s current-moment market cap.

To understand why Uber would invest nearly 5% of its worth to buy a smaller competitor, let’s advise ourselves of the efficiency of the group that it will plug into, namely Uber Consumes.

From Uber’s Q1 2020 financial reporting, the following chart will ground our expedition, showing how Consumes has performed in recent quarters:

Via Uber’s financial reporting. Q1 2019 on the left, Q1 2020 on the right.

Article curated by RJ Shara from Source. RJ Shara is a Bay Area Radio Host (Radio Jockey) who talks about the startup ecosystem – entrepreneurs, investments, policies and more on her show The Silicon Dreams. The show streams on Radio Zindagi 1170AM on Mondays from 3.30 PM to 4 PM.