Billionaire hedge fund manager Bill Ackman has built a sizable stake in Uber Technologies Inc (NYSE: UBER).
On Friday, the founder and chief executive of Pershing Square said he owned more than 30 million shares of the ride-hailing giant.
In total, his stake in Uber is worth about $2.3 billion.
Ackman loaded up on UBER at $75 a share on average, which he dubbed a “massive discount” in a post on X today.
Shares of the mobility company are down about 13% versus their year-to-date high at writing.
Why is Bill Ackman bullish on Uber stock?
Bill Ackman started buying Uber shares at the start of this year because it’s “one of the best managed and highest quality businesses in the world.”
Still, the New York-listed firm is trading at a significant discount to its intrinsic value at writing – a combination that’s “extremely rate, particularly for a large cap company,” he argued in his tweet.
The hedge fund manager has immense confidence in the leadership of Dara Khosrowshahi even though the company came in shy of earnings estimates in its recently reported quarter and offered muted guidance for the future.
That said, Uber stock is not a suitable pick for income investors as it doesn’t currently pay a dividend.
Ackman is an early Uber investor
Bill Ackman has been a “long-term customer and admirer” of Uber Technologies Inc. – having invested in it through a venture fund on its day.
The hedge fund manager has confidence in the leadership of CEO Khosrowshahi because “he’s done a superb job in transforming the company into a highly profitable and cash-generative growth machine” since taking over the helm in 2017.
In a post-earnings interview this week, the chief executive even argued that the commercialization of autonomous vehicles is possible only if the AV industry comes together with Uber.
Note that Wall Street agrees with Ackman’s optimism on Uber stock. The consensus rating on the mobility giant currently sits at “buy” with analysts calling for an upside to $89 on average which indicates potential for about a 20% gain from current levels.
Bill Baruch recently bought UBER as well
Despite missing on the earnings front this week, Uber came in ahead of expectations for revenue in its fourth financial quarter.
Still, shares of the multinational based out of San Francisco, CA tanked rather sharply after the earnings release, making Bill Baruch, the founder and president of Blue Line Futures load up on them as well.
Uber saw an 18% year-on-year increase in its mobility as well as delivery gross bookings in its fiscal Q4.
The company ended the quarter with 171 million monthly active users – up 14% versus the same quarter last year.
Note that Uber stock has already recovered its entire post-earnings decline.
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