The future of Italy’s coalition government remains uncertain despite reassurances from Salvini

The future longevity of Italy’s fractious coalition government remains uncertain ahead of European parliamentary elections, despite Deputy Prime Minister Matteo Salvini’s insistence that success at the polls this week would not prompt renewed efforts to change his Lega party’s governing agreement with the Five Star Movement (M5S). “This vote is about Europe, to change Europe, to change banks, agriculture, borders,” Salvini told CNBC in Bari, Italy, on Tuesday evening, after he was asked about th


The future longevity of Italy’s fractious coalition government remains uncertain ahead of European parliamentary elections, despite Deputy Prime Minister Matteo Salvini’s insistence that success at the polls this week would not prompt renewed efforts to change his Lega party’s governing agreement with the Five Star Movement (M5S). “This vote is about Europe, to change Europe, to change banks, agriculture, borders,” Salvini told CNBC in Bari, Italy, on Tuesday evening, after he was asked about th
The future of Italy’s coalition government remains uncertain despite reassurances from Salvini Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-22  Authors: willem marx
Keywords: news, cnbc, companies, remains, salvini, europe, change, future, european, party, lega, italian, star, uncertain, despite, coalition, reassurances, italys


The future of Italy's coalition government remains uncertain despite reassurances from Salvini

The future longevity of Italy’s fractious coalition government remains uncertain ahead of European parliamentary elections, despite Deputy Prime Minister Matteo Salvini’s insistence that success at the polls this week would not prompt renewed efforts to change his Lega party’s governing agreement with the Five Star Movement (M5S).

“This vote is about Europe, to change Europe, to change banks, agriculture, borders,” Salvini told CNBC in Bari, Italy, on Tuesday evening, after he was asked about the potential for a coalition collapse.

The unlikely alliance between a right-wing former separatist party and anti-establishment populists finally made it into office early last summer after months of wrangling over their respective manifestos and ministerial appointments.

Tensions between the two parties have heightened in recent months as the campaign for seats in the Brussels and Strasbourg-based parliament has crescendoed, and a first-time Lega candidate hinted to CNBC that the polls could indeed herald a shift in the government’s dynamic.

“I think both the Five Star and Lega are willing to continue working together,” said Ilaria Antelmi, who is standing for a Lega seat in the southern region of Italy, ahead of a final campaign stop by Salvini in Bari, a southeastern coastal city. “But after the European elections, we will see what the Italian people really think. We will understand where the balance of power lies.”

Her party leader Salvini was smilingly adamant in his interview with CNBC that he would seek no such alterations to his party’s deal with its coalition partners. “Nothing is going to change within the Italian government,” he said. “I just hope that, after the election, our relationship with the Five Star Movement will be less confrontational.”

“But even if I win, we won’t ask for more ministers, we are not going to change anything.”

Populist groups in Europe — among them the anti-immigration Lega party — have polled strongly during the electoral campaign and stand to make significant seat gains in the next European legislature.

Those changed levels of support were evident in the heart of Bari’s commercial district Tuesday night. Residents loudly cheered Salvini’s speech from a soundstage then lined up in their hundreds to take selfies with the leader of a party that had until quite recently railed against residents of southern Italian cities like Bari for their perceived ignorance and laziness.

There were signs too of Salvini and Lega critics, who have grown increasingly vocal. Alongside a heavy police presence, dozens marched in protest at his appearance in the city, carrying placards that read: “Fascist clown, leave the south” and “Salvini, chattering fool.”


Company: cnbc, Activity: cnbc, Date: 2019-05-22  Authors: willem marx
Keywords: news, cnbc, companies, remains, salvini, europe, change, future, european, party, lega, italian, star, uncertain, despite, coalition, reassurances, italys


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Here’s why global stocks aren’t sinking despite the US tariff hike

A global stock market sell-off started to ease on Friday despite the U.S. fulfilling a promise to ramp up tariffs on Chinese goods. The U.S. hiked tariffs from 10% to 25% on $200 billion worth of Chinese goods at 12:01 a.m. In response, Beijing said it “deeply regrets” the tariff hike and would take countermeasures — though no specifics were provided. Markets across the globe initially fell overnight but were quick to bounce back and trade higher. Uncertainty over trade talks will linger, but so


A global stock market sell-off started to ease on Friday despite the U.S. fulfilling a promise to ramp up tariffs on Chinese goods. The U.S. hiked tariffs from 10% to 25% on $200 billion worth of Chinese goods at 12:01 a.m. In response, Beijing said it “deeply regrets” the tariff hike and would take countermeasures — though no specifics were provided. Markets across the globe initially fell overnight but were quick to bounce back and trade higher. Uncertainty over trade talks will linger, but so
Here’s why global stocks aren’t sinking despite the US tariff hike Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-10  Authors: spriha srivastava, artyom ivanov, tass, getty images
Keywords: news, cnbc, companies, trade, tariffs, war, despite, stocks, sinking, nearly, initially, worth, hike, global, heres, higher, chinese, twolargest, worlds, arent, tariff


Here's why global stocks aren't sinking despite the US tariff hike

A global stock market sell-off started to ease on Friday despite the U.S. fulfilling a promise to ramp up tariffs on Chinese goods.

The U.S. hiked tariffs from 10% to 25% on $200 billion worth of Chinese goods at 12:01 a.m. ET Friday. In response, Beijing said it “deeply regrets” the tariff hike and would take countermeasures — though no specifics were provided.

Markets across the globe initially fell overnight but were quick to bounce back and trade higher. In Asia, mainland Chinese stocks jumped with the Shanghai composite rising more than 3%. In Europe, the pan-European Stoxx 600 traded nearly 1% higher in early deals with the German DAX up by the same amount. Stateside, Dow futures initially slipped and pointed to nearly triple-digit losses at the open, but soon recovered.

Uncertainty over trade talks will linger, but some analysts believe investors are still optimistic that the world’s two-largest economies will avoid a full-blown trade war.


Company: cnbc, Activity: cnbc, Date: 2019-05-10  Authors: spriha srivastava, artyom ivanov, tass, getty images
Keywords: news, cnbc, companies, trade, tariffs, war, despite, stocks, sinking, nearly, initially, worth, hike, global, heres, higher, chinese, twolargest, worlds, arent, tariff


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Despite Facebook’s struggles, one important contingent remains loyal

But one thing has remained constant: the percentage of small businesses that buy Facebook advertisements. A disastrous earnings report and weak guidance from July 2018 sent Facebook shares over a cliff, from which the company has now rebounded. But nothing has changed the minds of Main Street business owners as to the benefits of spending on Facebook to reach consumers. The Q2 survey found that 26% of small business owners have advertised on Facebook within the past few months. The CNBC|SurveyMo


But one thing has remained constant: the percentage of small businesses that buy Facebook advertisements. A disastrous earnings report and weak guidance from July 2018 sent Facebook shares over a cliff, from which the company has now rebounded. But nothing has changed the minds of Main Street business owners as to the benefits of spending on Facebook to reach consumers. The Q2 survey found that 26% of small business owners have advertised on Facebook within the past few months. The CNBC|SurveyMo
Despite Facebook’s struggles, one important contingent remains loyal Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-08  Authors: donovan russo, chip somodevilla, getty images
Keywords: news, cnbc, companies, q2, important, shares, businesses, despite, remains, owners, contingent, facebooks, business, small, say, facebook, street, loyal, survey, struggles


Despite Facebook's struggles, one important contingent remains loyal

Facebook shares have whipsawed in the past year, falling from close to $220 last summer to a low around $125 in early 2019 before climbing back to near-$190. But one thing has remained constant: the percentage of small businesses that buy Facebook advertisements.

As Facebook rolls out a series of new tools in the attempt to bring more small businesses into its advertising mix, it is a minority of Main Street businesses that say they advertise on Facebook, and at a level that is not showing growth or retreat, according to the CNBC|SurveyMonkey Small Business Survey for the second quarter.

A disastrous earnings report and weak guidance from July 2018 sent Facebook shares over a cliff, from which the company has now rebounded. Ongoing scrutiny of its approach to consumer privacy and threat of increased regulation continue to embed uncertainty in the social media giant’s future. But nothing has changed the minds of Main Street business owners as to the benefits of spending on Facebook to reach consumers.

The Q2 survey found that 26% of small business owners have advertised on Facebook within the past few months. The last time the survey asked small business owners about Facebook ads, in Q2 of 2018, 25% indicated they had recently advertised on it. Sixty percent of business owners say they have not purchased ads on Facebook, compared to 62% who said that about Facebook ad-buying a year ago.

The CNBC|SurveyMonkey Small Business Survey for Q2 included responses from 2,100 small business owners across the country collected between April 15 and April 22.


Company: cnbc, Activity: cnbc, Date: 2019-05-08  Authors: donovan russo, chip somodevilla, getty images
Keywords: news, cnbc, companies, q2, important, shares, businesses, despite, remains, owners, contingent, facebooks, business, small, say, facebook, street, loyal, survey, struggles


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Despite Brexit uncertainty, some analysts are turning bullish on UK assets

Sterling and U.K. equities, particularly banks, are offering a surprisingly positive outlook, market experts told CNBC Friday. In a press conference following the announcement, Governor Mark Carney hinted at future rate hikes, striking a slightly more hawkish tone despite ongoing uncertainty over the U.K.’s departure from the European Union. If Brexit was put aside, however, and investment growth in the U.K. was to ramp up again, the BOE “might turn a little more hawkish,” he told CNBC’s “Squawk


Sterling and U.K. equities, particularly banks, are offering a surprisingly positive outlook, market experts told CNBC Friday. In a press conference following the announcement, Governor Mark Carney hinted at future rate hikes, striking a slightly more hawkish tone despite ongoing uncertainty over the U.K.’s departure from the European Union. If Brexit was put aside, however, and investment growth in the U.K. was to ramp up again, the BOE “might turn a little more hawkish,” he told CNBC’s “Squawk
Despite Brexit uncertainty, some analysts are turning bullish on UK assets Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-03  Authors: elliot smith
Keywords: news, cnbc, companies, uncertainty, bullish, brexit, assets, strategy, growth, turning, told, hawkish, surprisingly, despite, analysts, market, uk, banks, sterling


Despite Brexit uncertainty, some analysts are turning bullish on UK assets

Sterling and U.K. equities, particularly banks, are offering a surprisingly positive outlook, market experts told CNBC Friday.

The Bank of England (BOE) held interest rates steady Thursday while revising up its GDP (gross domestic product) growth forecasts for 2019 on the back of strong first-quarter data. In a press conference following the announcement, Governor Mark Carney hinted at future rate hikes, striking a slightly more hawkish tone despite ongoing uncertainty over the U.K.’s departure from the European Union.

HSBC Global Head of Foreign Exchange Strategy David Bloom said a substantial dovish slant in the market meant it was refusing to price in more hawkish signals from central banks. If Brexit was put aside, however, and investment growth in the U.K. was to ramp up again, the BOE “might turn a little more hawkish,” he told CNBC’s “Squawk Box Europe” Friday.

“We’re quite bullish on sterling actually, as we think it’s got plenty of room to rise against the dollar,” Bloom said.

Sterling closed trading at just over $1.30 Thursday, but HSBC’s currency strategy team has forecast it to reach $1.37 by the end of 2019.

On the equity front, EY Global Assurance Leader Keith Pogson said U.K. banks were surprisingly well positioned to navigate the political uncertainty across major European economies.


Company: cnbc, Activity: cnbc, Date: 2019-05-03  Authors: elliot smith
Keywords: news, cnbc, companies, uncertainty, bullish, brexit, assets, strategy, growth, turning, told, hawkish, surprisingly, despite, analysts, market, uk, banks, sterling


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UK decides to keep pennies in circulation despite rise of cashless payments

One pence and 2 pence coins will remain in circulation a year after the U.K. finance minister had called the coins “obsolete.” In 2016, the U.K.’s Royal Mint, the government-owned company that produces coins for the country, revealed there are 11.3 billion pennies in circulation. But 60% of 1 pence and 2 pence coins are only used once, while 8% of pennies are thrown away. Australia phased out 1 cent and 2 cent coins in the 1990s, while Canada stopped producing copper coins in 2013. Steel prices


One pence and 2 pence coins will remain in circulation a year after the U.K. finance minister had called the coins “obsolete.” In 2016, the U.K.’s Royal Mint, the government-owned company that produces coins for the country, revealed there are 11.3 billion pennies in circulation. But 60% of 1 pence and 2 pence coins are only used once, while 8% of pennies are thrown away. Australia phased out 1 cent and 2 cent coins in the 1990s, while Canada stopped producing copper coins in 2013. Steel prices
UK decides to keep pennies in circulation despite rise of cashless payments Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-03  Authors: tom chitty
Keywords: news, cnbc, companies, prices, penny, cashless, copper, circulation, mint, despite, coins, pence, cent, royal, uk, decides, payments, pennies, steel, rise


UK decides to keep pennies in circulation despite rise of cashless payments

One pence and 2 pence coins will remain in circulation a year after the U.K. finance minister had called the coins “obsolete.”

On Friday, he announced a task force “to safeguard the future of cash and ensure its availability for years to come.”

In 2016, the U.K.’s Royal Mint, the government-owned company that produces coins for the country, revealed there are 11.3 billion pennies in circulation. But 60% of 1 pence and 2 pence coins are only used once, while 8% of pennies are thrown away.

This means the Royal Mint has to produce even more pennies to replace the ones that have gone out of circulation, about 550 million a year.

The value of small change is being debated around the globe. Australia phased out 1 cent and 2 cent coins in the 1990s, while Canada stopped producing copper coins in 2013.

In the euro zone, where 1 cent and 2 cent coins are still produced, countries like Ireland are voluntarily rounding prices to the nearest 5 cents to avoid using smaller change.

While the Royal Mint won’t reveal how much it costs to make a penny — nor how much the U.K. would save by stopping production, it did say that it costs less than 1 pence to make 1 pence.

The British penny is made of steel and coated in copper. Steel prices have increased over the years, which helps explain why Canada ceased minting its copper-coated steel penny back in 2012.

In America however, 2017 research showed that it cost 1.8 cents to produce one U.S. penny.

While the U.S. cent was mostly made of copper for more than 150 years, rising copper prices forced the U.S. Mint to dramatically reduce the amount of copper used in the coin.

Now a penny is primarily made up of zinc — and is only 2.5% copper. Though ironically now zinc prices are rising too.


Company: cnbc, Activity: cnbc, Date: 2019-05-03  Authors: tom chitty
Keywords: news, cnbc, companies, prices, penny, cashless, copper, circulation, mint, despite, coins, pence, cent, royal, uk, decides, payments, pennies, steel, rise


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Weekly mortgage applications drop 4.3%, despite lower interest rates

It may be the heart of the spring housing season, but the mortgage market isn’t seeing big business. Mortgage application volume fell 4.3% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Mortgage applications to purchase a home fell 4% for the week and were barely 1% higher from a year ago. That sales surge may have been due to a sharp drop in mortgage rates. Mortgage rates started this week slightly higher, but there is big economic d


It may be the heart of the spring housing season, but the mortgage market isn’t seeing big business. Mortgage application volume fell 4.3% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Mortgage applications to purchase a home fell 4% for the week and were barely 1% higher from a year ago. That sales surge may have been due to a sharp drop in mortgage rates. Mortgage rates started this week slightly higher, but there is big economic d
Weekly mortgage applications drop 4.3%, despite lower interest rates Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-01  Authors: diana olick
Keywords: news, cnbc, companies, homes, sales, buyers, week, interest, lower, 43, rates, higher, supply, volume, applications, despite, mortgage, drop, market, weekly


Weekly mortgage applications drop 4.3%, despite lower interest rates

It may be the heart of the spring housing season, but the mortgage market isn’t seeing big business.

Mortgage application volume fell 4.3% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 4.5% higher annually, thanks to stronger refinance activity.

While applications to refinance a home loan were 5% percent lower for the week, they were still 11% higher than a year ago, because interest rates were 38 basis points higher then. Refinance volume overall, however, is still much lower than normal because so many homeowners refinanced to the historically low rates that followed the last housing crash.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.42% from 4.46%, with points increasing to 0.46 from 0.44 (including the origination fee) for loans with a 20% down payment.

“Mortgage rates were lower last week, as concerns over global growth, particularly in Germany, outweighed more positive domestic news on first quarter GDP growth and business investment,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.

Lower rates didn’t get more buyers off the fence, either. Mortgage applications to purchase a home fell 4% for the week and were barely 1% higher from a year ago. Purchase volume has been weakening this month, despite brighter signs in the overall housing market. There is more supply of homes for sale, and overheated home prices are finally beginning to chill.

Home sales are sending mixed signals right now. Sales started the year weaker, but pending home sales in March jumped more than expected. Pending sales are based on signed contracts. Sales of newly built homes, also measured in contracts, jumped in March as well. That sales surge may have been due to a sharp drop in mortgage rates. Rates have since edged higher, but not by much.

The fact that today’s buyers are so sensitive to the latest mortgage rate swings shows just how much they are struggling to afford homes at all, especially first-time buyers. Supply is leanest on the low end of the market, and that is where the bulk of buyers are. Even as some higher-end homes sit on the market longer, it is still not uncommon in many metropolitan markets to see heavy competition for lower-priced homes. Most of the stagnation in sales is on the highest end of the market, where supply is plentiful.

Mortgage rates started this week slightly higher, but there is big economic data ahead that could swing rates in either direction. The Federal Reserve will make a policy announcement Wednesday afternoon, and the monthly employment report is set to be released on Friday.


Company: cnbc, Activity: cnbc, Date: 2019-05-01  Authors: diana olick
Keywords: news, cnbc, companies, homes, sales, buyers, week, interest, lower, 43, rates, higher, supply, volume, applications, despite, mortgage, drop, market, weekly


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BP first-quarter profits slip despite oil price recovery

BP reported first-quarter profit largely in line with expectations on Tuesday, citing tough market conditions at the start of the year. The British oil giant posted first-quarter underlying replacement cost profit, used as a proxy for net profit, of $2.4 billion, versus $2.3 billion expected in a Reuters poll. The London-listed company said profits were supported by stronger results from its oil and gas trading operations. Gilvary said the three-month period through to March had been particularl


BP reported first-quarter profit largely in line with expectations on Tuesday, citing tough market conditions at the start of the year. The British oil giant posted first-quarter underlying replacement cost profit, used as a proxy for net profit, of $2.4 billion, versus $2.3 billion expected in a Reuters poll. The London-listed company said profits were supported by stronger results from its oil and gas trading operations. Gilvary said the three-month period through to March had been particularl
BP first-quarter profits slip despite oil price recovery Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-04-30  Authors: sam meredith
Keywords: news, cnbc, companies, oil, prices, profit, bp, price, start, recovery, results, billion, given, firstquarter, tough, pretty, profits, despite, slip


BP first-quarter profits slip despite oil price recovery

BP reported first-quarter profit largely in line with expectations on Tuesday, citing tough market conditions at the start of the year.

The British oil giant posted first-quarter underlying replacement cost profit, used as a proxy for net profit, of $2.4 billion, versus $2.3 billion expected in a Reuters poll. That compared with a profit of $2.6 billion a year earlier and $3.5 billion in the final three months of 2018.

The London-listed company said profits were supported by stronger results from its oil and gas trading operations.

“It was a pretty resilient set of results actually given the environment we came into at the start of the year,” Brian Gilvary, chief financial officer at BP, told CNBC’s “Squawk Box Europe” on Tuesday.

Gilvary said the three-month period through to March had been particularly “tough” because of adverse weather conditions, assets being put out of action and lower oil prices in January.

“I think oil prices look pretty firm given where we are today but we are going to continue to maintain capital discipline,” he added.


Company: cnbc, Activity: cnbc, Date: 2019-04-30  Authors: sam meredith
Keywords: news, cnbc, companies, oil, prices, profit, bp, price, start, recovery, results, billion, given, firstquarter, tough, pretty, profits, despite, slip


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Uber looks almost nothing like Amazon despite what it plans to tell Wall Street

When Uber starts meeting investors this week for its upcoming IPO, the ride-hailing company is expected to compare itself to a business that it hardly resembles: Amazon. It’s a compelling narrative for Uber, because the knock on Amazon for years was that it couldn’t turn a profit. We now know it can — Amazon recorded net income of $3.6 billion in the latest quarter. Uber burns cash today, as did Amazon when it went public in 1997. The problem for Uber is it just doesn’t have much in common with


When Uber starts meeting investors this week for its upcoming IPO, the ride-hailing company is expected to compare itself to a business that it hardly resembles: Amazon. It’s a compelling narrative for Uber, because the knock on Amazon for years was that it couldn’t turn a profit. We now know it can — Amazon recorded net income of $3.6 billion in the latest quarter. Uber burns cash today, as did Amazon when it went public in 1997. The problem for Uber is it just doesn’t have much in common with
Uber looks almost nothing like Amazon despite what it plans to tell Wall Street Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-04-30  Authors: eugene kim
Keywords: news, cnbc, companies, looks, amazon, uber, york, investments, wall, worlds, plans, valley, tell, turn, amazonthe, despite, way, business, street


Uber looks almost nothing like Amazon despite what it plans to tell Wall Street

When Uber starts meeting investors this week for its upcoming IPO, the ride-hailing company is expected to compare itself to a business that it hardly resembles: Amazon.

The parallel, according to The New York Times, is based on the idea that Uber will eventually grow into an Amazon-like “platform” business, with ride sharing as the first step on its way to becoming a transportation behemoth. It’s a compelling narrative for Uber, because the knock on Amazon for years was that it couldn’t turn a profit. We now know it can — Amazon recorded net income of $3.6 billion in the latest quarter.

Uber burns cash today, as did Amazon when it went public in 1997. Both manage huge logistics operations behind the scenes that require hefty upfront spending. So shareholders just need to be patient for the long term and wait for those investments to pay off. That’s what Uber would say.

Silicon Valley companies love to invoke Amazon and Jeff Bezos. He’s the CEO who defied the odds and made Wall Street look silly for ever doubting his upstart could turn its massive investments into not one, but several dominant businesses on the way to becoming one of the world’s most valuable companies.

The problem for Uber is it just doesn’t have much in common with Amazon.

“The Amazon analogy has been carried too far and is being used as an excuse to justify high pricing for every money-losing, Silicon Valley venture,” said Aswath Damodaran, who teaches finance at New York University’s Stern School of Business.


Company: cnbc, Activity: cnbc, Date: 2019-04-30  Authors: eugene kim
Keywords: news, cnbc, companies, looks, amazon, uber, york, investments, wall, worlds, plans, valley, tell, turn, amazonthe, despite, way, business, street


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Uber looks almost nothing like Amazon despite what it plans to tell Wall Street

When Uber starts meeting investors this week for its upcoming IPO, the ride-hailing company is expected to compare itself to a business that it hardly resembles: Amazon. It’s a compelling narrative for Uber, because the knock on Amazon for years was that it couldn’t turn a profit. We now know it can — Amazon recorded net income of $3.6 billion in the latest quarter. Uber burns cash today, as did Amazon when it went public in 1997. And despite all the investments the company has made, Amazon gene


When Uber starts meeting investors this week for its upcoming IPO, the ride-hailing company is expected to compare itself to a business that it hardly resembles: Amazon. It’s a compelling narrative for Uber, because the knock on Amazon for years was that it couldn’t turn a profit. We now know it can — Amazon recorded net income of $3.6 billion in the latest quarter. Uber burns cash today, as did Amazon when it went public in 1997. And despite all the investments the company has made, Amazon gene
Uber looks almost nothing like Amazon despite what it plans to tell Wall Street Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-04-30  Authors: eugene kim
Keywords: news, cnbc, companies, investments, street, york, companies, plans, uber, despite, damodaran, tell, billion, cash, amazon, looks, wall, way, business


Uber looks almost nothing like Amazon despite what it plans to tell Wall Street

When Uber starts meeting investors this week for its upcoming IPO, the ride-hailing company is expected to compare itself to a business that it hardly resembles: Amazon. The parallel, according to The New York Times, is based on the idea that Uber will eventually grow into an Amazon-like “platform” business, with ride sharing as the first step on its way to becoming a transportation behemoth. It’s a compelling narrative for Uber, because the knock on Amazon for years was that it couldn’t turn a profit. We now know it can — Amazon recorded net income of $3.6 billion in the latest quarter. Uber burns cash today, as did Amazon when it went public in 1997. Both manage huge logistics operations behind the scenes that require hefty upfront spending. So shareholders just need to be patient for the long term and wait for those investments to pay off. That’s what Uber would say. Silicon Valley companies love to invoke Amazon and Jeff Bezos. He’s the CEO who defied the odds and made Wall Street look silly for ever doubting his upstart could turn its massive investments into not one, but several dominant businesses on the way to becoming one of the world’s most valuable companies. The problem for Uber is it just doesn’t have much in common with Amazon. “The Amazon analogy has been carried too far and is being used as an excuse to justify high pricing for every money-losing, Silicon Valley venture,” said Aswath Damodaran, who teaches finance at New York University’s Stern School of Business.

Consistency

Damodaran, who’s known as Wall Street’s “Dean of Valuation” for his work on the proper way to value companies, said the biggest difference between Amazon and others is its culture of consistency. From the beginning, Amazon has made clear it is focusing on revenue and cash flow appreciation while reinforcing the idea of investing profits in long-term growth. In fact, Amazon’s revenue growth has dipped below 20% only twice since its founding, even as it surpassed $230 billion in sales last year. And despite all the investments the company has made, Amazon generated positive cash flow in all but three years since going public.

A truck pulling an Amazon Prime branded cargo container waits beside the entrance gate at Amazon.com Inc.’s new fulfillment center in Kolbaskowo, Poland, on Friday, Feb. 16, 2018. Bartek Sadowski | Bloomberg | Getty Images

On top of that, the leadership team has remained stable, telling a familiar story “that does not waver, even in the face of adversity,” Damodaran said. Uber, by contrast, has been plagued by management upheaval, leading most notably to the ouster in 2017 of co-founder and CEO Travis Kalanick. “That is not something that you can acquire, but has to come from deep in the organizational culture,” Damodaran said. “I firmly believe that Amazon is one of a kind.” Damodaran previously told CNBC that Uber should be valued at around $60 billion, much lower than the $80 billion to $90 billion range suggested by its updated IPO filing last week. Damodran said Uber’s lack of a “viable business model” to reach profitability is “scary.”

Smaller losses and lazy competitors


Company: cnbc, Activity: cnbc, Date: 2019-04-30  Authors: eugene kim
Keywords: news, cnbc, companies, investments, street, york, companies, plans, uber, despite, damodaran, tell, billion, cash, amazon, looks, wall, way, business


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Uber is pitching itself to investors as the next Amazon, despite no path to profits

Leading up to its public market debut, Uber hopes investors will align the stock with Amazon’s rather than its close rival, Lyft. It’s no wonder why Uber would choose Amazon as its model, judging by the stock’s performance. Like Amazon, Uber has prided itself on diversifying beyond the core service for which it is known. It’s not yet clear whether Uber has the same kind of breakout business that can lead to profits. But even at the lower valuation, Uber’s Amazon comparison stokes the “fear of mi


Leading up to its public market debut, Uber hopes investors will align the stock with Amazon’s rather than its close rival, Lyft. It’s no wonder why Uber would choose Amazon as its model, judging by the stock’s performance. Like Amazon, Uber has prided itself on diversifying beyond the core service for which it is known. It’s not yet clear whether Uber has the same kind of breakout business that can lead to profits. But even at the lower valuation, Uber’s Amazon comparison stokes the “fear of mi
Uber is pitching itself to investors as the next Amazon, despite no path to profits Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-04-29  Authors: lauren feiner
Keywords: news, cnbc, companies, pitching, profits, despite, things, billion, transport, business, ubers, amazon, valuation, debut, told, uber, path, investors


Uber is pitching itself to investors as the next Amazon, despite no path to profits

Leading up to its public market debut, Uber hopes investors will align the stock with Amazon’s rather than its close rival, Lyft. Uber plans to compare itself to Amazon during its pre-IPO roadshow in order to justify the billions of dollars it continues to lose, The New York Times reported.

It’s no wonder why Uber would choose Amazon as its model, judging by the stock’s performance. Amazon’s stock price has multiplied from $18 per share at its debut in 1997 to nearly $2,000. Lyft’s, by contrast, has tumbled from its debut price of $72 this March to just over $57. Uber did not immediately respond to a request for comment on its roadshow pitch.

Amazon’s success in the public market despite losing money for much of its existence is a favorite comparison for other companies debuting without profits. But Amazon is the exception, not the rule.

Amazon’s IPO serves as a handy reference point for Uber, which reported an adjusted EBITDA loss of $1.85 billion in 2018 along with slowing revenue growth. It also reported about a $1 billion loss from operations for the first quarter of 2019 in its updated S-1 filing last week. Amazon also debuted without yet turning a profit, saying it planned to invest in building its business into new areas, as Uber has also said.

Like Amazon, Uber has prided itself on diversifying beyond the core service for which it is known. While Lyft has narrowed in its focus on ride sharing and personal mobility, like electric scooters, Uber has expanded into food delivery, freight and even flying cars.

But for Amazon, profitability has been driven largely by Amazon Web Services, which represented 13% of total sales at Amazon and 50% of its overall operating income in its first quarter of 2019. It’s not yet clear whether Uber has the same kind of breakout business that can lead to profits. Uber’s other bets are unlikely to add as much value as AWS has to Amazon, Wireless Fund lead portfolio manager Paul Meeks previously told CNBC.

“They’ll try to leverage their platform into other things, but the other things will be transport because that’s their gig and the transport business has a lot of established players,” Meeks said.

After Uber priced its shares between $44 and $50, its valuation fell from an expected $100 billion to a range of $80.53 billion to $91.51 billion on a fully diluted basis. But even at the lower valuation, Uber’s Amazon comparison stokes the “fear of missing out.”

“That’s a huge fear,” Wedbush Securities analyst Dan Ives previously told CNBC. “That was a seminal event in terms of investing in tech stocks in the last 20 years.”

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Watch: Here’s how Uber is pitching itself to investors


Company: cnbc, Activity: cnbc, Date: 2019-04-29  Authors: lauren feiner
Keywords: news, cnbc, companies, pitching, profits, despite, things, billion, transport, business, ubers, amazon, valuation, debut, told, uber, path, investors


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