Uber (UBER)’s IPO is dominating financial news this morning, but it may seem to be of little interest to energy-focused investors. There is, however, a reason why you should consider it even if energy is your sector of choice. Before doing so though, you, you should look at and consider the implications of three charts.
Uber is generally considered a tech stock, which makes sense given that it is app-based, but the company’s plans for the future have potentially massive implications for the energy sector. In an interview aired this morning on CNBC, CEO Dara Kosrowshahi laid out those plans in an interesting way. He likened transportation to cable television in that it can be seen as a bundle.
You use a car for many different things he said, and just as Netflix (NFLX) and others allowed consumers to “unbundle” TV, so Uber aims to let car owners do the same by using them for specific purposes such as food pick-up, rides to nights out, or even the school run. Given that transportation accounts for the most oil use of anything, reduced, selective use of personal autos has implications for oil, and therefore for the energy sector as a whole.
So, for those invested in energy, buying UBER as a hedge against future disruption makes sense. As always with trading and investing, though, timing matters.
With any IPO, the focus of most investors is inevitably the future. There is, by definition, a limited amount of historical data on the…