Key Points
- Uber’s rumored acquisition of Expedia doesn’t make sense
- While expansion in to Uber Eats has been accretive for shareholders, Expedia doesn’t have as obvious a way to add value in their portfolio
- Bundled travel packages may be the goal, but shareholders will have to watch closely
- Also: Uber’s prospects aren’t nearly as good as ‘The Next Nvidia’ stocks that has a top analyst buzzing. Read their report for free here.
Watch The Video
Read The Transcript
[00:00:00] Doug McIntyre: Uber (Nasdaq: UBER) is thinking about buying Expedia (Nasdaq: EXPE). Now there’s a deal that doesn’t make any sense to me at all. So maybe you could tell me whether it makes any sense to you. I,
[00:00:14] Lee Jackson: I’m not really sure. You know, you can understand why they expanded into delivering food. Oh, sure. I mean, that makes a lot of sense. Now, they can, and buying Expedia would not be cheap.
[00:00:28] Lee Jackson: That’s for sure. Uber. So I’m not exactly sure how an Uber entry into that business would work. But again, um, perhaps there’s more to the eye than
[00:00:40] Doug McIntyre: we see. Well, here’s what I don’t like about a deal like that. If it’s actually something that might go through. Expedia is doing business with everybody in the transportation industry.
[00:00:53] Doug McIntyre: I don’t know, you know, people booking cars. So it would seem to me that you’re actually buying something that’s already helping your competitors
[00:01:06] Doug McIntyre: sort of, you know what I’m saying to this? It’s like, well, let’s diversify into a related industry because strategically it’s going to help us get. More sales in our core business.
[00:01:21] Lee Jackson: So
[00:01:21] Doug McIntyre: if I walk
[00:01:22] Lee Jackson: through that, I don’t see it. And the only thing I can see is an integration of, if they did buy them, an integration of Uber services into what Expedia sells.
[00:01:35] Lee Jackson: In other words, if you book a travel package. Hey, you can, you know, get a 400, 400 purchase of Uber travel time and you don’t have to fiddle with anything. It’ll be included in your, in your package pricing. And, you know, something along those lines. But again, yeah, it’s, it’s not apples to apples here. And I’m not really sure how you would blend them into Uber seamlessly.
[00:02:02] Lee Jackson: Unless it would just be a standalone sort of separate entity.
[00:02:06] Doug McIntyre: To me, it’s like American airlines buying Expedia. I mean, maybe Expedia is a good business. Every other airline is on Expedia. So again, I am sure that the wall street journal is right. These conversations are going on. I think they may happen, but if I am a, uh, If I’m a shareholder in Uber, I don’t like this deal.
[00:02:33] Lee Jackson: I don’t think I do either. Especially, I mean, Uber is just recently in the last, what, three years or, you know, where they were actually making pretty solid money after years of losses. And this seems like it would, unless it was an all stock deal, it seems like it would stress their finances terribly.
[00:02:54] Doug McIntyre: All right.
[00:02:54] Doug McIntyre: Well, every once in a while we hear about a deal that doesn’t make any sense at all. It’s helpful sometimes for. People in the investing world to think about the fact that when they hear something that doesn’t make sense That involves a company where they own the stock. You should think about the fact that it may not make sense and be worried.
[00:03:13] Lee Jackson: Yeah. And keep a close eye on it because Uber has done well and, and, you know, it’s run by smart people, but smart people generally don’t, you know, dip their toes into, uh, areas that they’re not familiar with, uh, see AT& T, how good that worked for them. You know, uh, it just, you know, stick, you know, dance with the one that brung you and move on.
[00:03:33] Doug McIntyre: Yeah, exactly.
Is Your Money Earning the Best Possible Rate? (Sponsor)
Let’s face it: If your money is just sitting in a checking account, you’re losing value every single day. With most checking accounts offering little to no interest, the cash you worked so hard to save is gradually being eroded by inflation.
However, by moving that money into a high-yield savings account, you can put your cash to work, growing steadily with little to no effort on your part. In just a few clicks, you can set up a high-yield savings account and start earning interest immediately.
There are plenty of reputable banks and online platforms that offer competitive rates, and many of them come with zero fees and no minimum balance requirements. Click here to see if you’re earning the best possible rate on your money!
The post Uber’s (UBER) Acquisition Doesn’t Make Any Sense appeared first on 24/7 Wall St..