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Activist investor Bill Ackman has acquired more than $2.3 billion in stake in ride-sharing company Uber, snapping up the stock he said was priced at a “substantial discount.”
Ackman unveiled new stock after Uber recorded weaker than expected fourth-quarter earnings this week, but argued that self-driving cars could revolutionize rather than disrupt the business I told him I had done it.
On Friday, the company’s shares rose more than 9%, with its market value exceeding $160 billion.
“We believe Uber is one of the world’s most managed and top quality businesses,” wrote Ackman, who runs the hedge fund Pershing Square Capital Management, on X on Friday.
“Amazingly, you can buy it at a huge discount on intrinsic value. This preferred combination of attributes is extremely rare, especially for large cap companies.”
Pershing Square and Uber did not respond immediately to requests for comment.
In a post on X, Ackman said Uber has been “stricken by unstable management” for many years, but he praised CEO Dara Khosrowshahi for ultimately grouping.
Khosrowshahi replaced Uber co-founder Travis Kalanick in 2017.
Ackman said his hedge fund began buying shares in Uber in early January, and the group currently owns more than 30 million shares. He made his first investment in the company during his founding in 2009, and small stakes were promoted through venture capital funds.
Uber reported its first annual operating profit in February last year. This is the turning point for the Silicon Valley Company.
There was a difficult period around the 2019 initial stock offering and failed to meet expectations of $120 billion worth. When the list was completed, Uber’s debut was the worst dollar loss on the first day for a US company to be released.
Last February, Khosrowshahi said the results were “a point of inflection for Uber and proved that it could continue to generate large-scale, profitable growth.”
The company again reported annual profitability last year, aiming to integrate self-driving cars into the fleet. Last year, they signed a contract with Alphabet’s subsidiary Waymo, and this week they opened a waiting list for self-driving cars in Austin, Texas.
