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Activist investor Bill Ackman has taken a stake of more than $2.3bn in the ride-share company Uber, snapping up shares that he said were priced at a “massive discount”.
Ackman announced the new stake after Uber posted weaker than expected fourth-quarter earnings this week, but heralded what it claimed was a more than “$1tn-plus opportunity” that autonomous vehicles could revolutionise rather than disrupt its business.
On Friday, the company’s stock closed 6.6 per cent higher, giving the group a market capitalisation of almost $160bn.
“We believe that Uber is one of the best managed and highest quality businesses in the world,” Ackman, who runs hedge fund Pershing Square Capital Management, wrote on Friday on X.
“Remarkably, it can still be purchased at a massive discount to its intrinsic value. This favourable combination of attributes is extremely rare, particularly for a large cap company.”
Pershing Square and Uber did not immediately respond to requests for comment.
While Ackman said in the post on X that Uber had “suffered from erratic management” over the years, he praised chief executive Dara Khosrowshahi for finally making the group profitable.
Khosrowshahi replaced Uber co-founder Travis Kalanick in 2017 after he became ensnared in a string of scandals, including allegations that he led an organisation that turned a blind eye to workplace sexual harassment.
Ackman said that his hedge fund began buying up Uber’s stock in early January and that the group now owned more than 30mn shares. He made his first investment in the company around its founding in 2009, with a small stake facilitated through a venture capital fund.
Uber reported its first annual operating profit last February, a turning point for the Silicon Valley company.
It had a difficult period around its initial public offering in 2019, which failed to meet expectations of a $120bn value. When it did list, Uber’s debut was the worst first-day dollar loss for a US company going public.
Last February, Khosrowshahi said the results were “an inflection point for Uber, proving that we can continue to generate strong profitable growth at scale”.
The company reported annual profitability again last year, and aims to integrate autonomous vehicles into its fleet. It signed a deal with Alphabet subsidiary Waymo last year, and this week opened a waiting list for its self-driving vehicles in Austin, Texas.
